A federal judge in Texas ruled against the Federal Trade Commission's April 2024 ban on noncompete clauses in employment contracts.
The ban, which was set to go into effect across the U.S. on Sept. 4, would have prevented employers from enforcing existing noncompete clauses and requiring new employees to sign noncompetes, according to an Aug. 23 news release from the American Dental Association.
Based on the ruling from U.S. District Judge Ada Brown, employers can continue to use noncompete agreements. In her ruling, Judge Brown said that the FTC lacked the authority to implement a ban on noncompetes.
ADA President Linda Edgar, DDS, advised practice owners who have noncompetes with their staff and employee dentists who have noncompete clauses to contact a lawyer about the ruling.
It is currently unclear whether the FTC will appeal the ruling or whether the agency will seek an emergency order to enforce the ban during an appeal, the release said.