“I can ignore my noncompete because Biden banned them, right?”
I can’t tell you how many times I’ve heard this over the past few weeks. No, neither the Biden Administration nor the Federal Trade Commission has banned noncompetes. Even if the FTC were to attempt to do so, the new rule would almost certainly be immediately challenged in court. Chances are, such a rule would be litigated for years and ultimately end up before the United States Supreme Court. Nothing has changed regarding how Texas courts view noncompete agreements.
On July 9, 2021, President Biden signed an Executive Order aimed at promoting competition in the American economy. Among other things, this Executive Order encourages the Federal Trade Commission (FTC) to ban or limit the use of non-compete agreements for certain types of workers, including those who are considered low-wage earners and those who work in industries where non-compete agreements are often abused.
However, this Executive Order does not directly impact the laws surrounding non-compete agreements in Texas or any other state. Non-compete agreements are still enforceable in Texas, and employers can continue to use them in certain circumstances.
Read: Are Non-Competes Enforceable in Texas in 2024?
If you are dealing with a non-compete agreement issue in Texas, it is important to understand the current state of the law. Non-compete agreements are generally enforceable in Texas if they are reasonable in scope, duration, and geographic area. This means that if you signed a non-compete agreement that is overly broad or restrictive, you may be able to challenge its enforceability.
So, while the Biden Administration did issue an Executive Order encouraging the FTC to limit the use of non-compete agreements in certain scenarios, it does not have an immediate impact on the enforceability of non-compete agreements in Texas. If you are facing a non-compete agreement issue, it is important to consult with a qualified Texas attorney who can help you understand your rights and options.