August 21, 2024 Update: The FTC’s Ban on Non-Competes will no longer take effect on Sept. 4, 2024. Please refer to the article Federal Trade Commission’s Ban on Non-Competes Blocked for more information.

Hawaii Employers Council previously shared on April 30, 2024 that the Federal Trade Commission (FTC) issued a final rule banning non-compete agreements, which was set to take effect on September 4, 2024.

On July 3, 2024, a Texas court issued a preliminary injunction that temporarily stops the enforcement of this final rule for only the plaintiffs in this case.  It is not a nation-wide injunction against the FTC ban. This means that the FTC's ban is still set to become effective on September 4, 2024 for most businesses across the nation, including the majority of employers in the state of Hawaii. The judge in that lawsuit is expected to issue a final decision for this case on or about August 30, 2024.  In addition, there is another similar complaint challenging the FTC’s ban in Pennsylvania that should be decided on or about July 23, 2024.

Because it is possible that the final rule may go into effect on September 4, 2024, employers should still prepare for the FTC’s rule. Recommendations to prepare for this rule were provided in our April 30th article.

HEC will continue to monitor this situation and provide appropriate updates. If you have any questions regarding non-compete agreements or recommended next steps, please contact your HR Consultant or our HR Hotline.