The U.S. District Court for the Northern District of Texas has ruled against the Federal Trade Commission's (FTC) rule banning non-compete agreements, deeming it unlawful. The decision was made in the case Ryan, LLC v. Federal Trade Commission, where the court determined that the FTC's rule exceeded its statutory authority and should not be implemented or enforced.

Beth Milito, Executive Director of the NFIB’s Small Business Legal Center, commented on the ruling: “Small businesses can breathe a sigh of relief following this decision. This rule would have been disastrous for small businesses on many levels. Thankfully the Court agreed and rejected the FTC’s final rule before it could wreak havoc on Main Street employers.”

The case centered around an FTC rule issued in April 2024 that aimed to ban non-compete agreements. The National Federation of Independent Business (NFIB), along with several business groups, opposed this rule from its inception. In their amicus brief, they argued that the rule was based on a flawed cost-benefit analysis and highlighted inconsistencies in the Commission’s reasoning, labeling it arbitrary and capricious.

The amicus brief was filed alongside various organizations including the National Retail Federation, International Franchise Association, Associated Builders and Contractors, American Hotel & Lodging Association, National Association of Wholesale Distributors, Independent Electrical Contractors Consumer Technology Association, Home Care Association, Restaurant Law Center, and U.S. Council for International Business.

The NFIB Small Business Legal Center is dedicated to protecting small business owners' rights in courts across the nation. Currently active in more than 40 cases at both federal and state levels—including cases before the U.S. Supreme Court—the center continues to advocate for small businesses.