Nope: in this game, friendly fire is
always on. It adds strategy and discourages AOE spamming.

Worth noting: part of the reason I left friendly fire off by default in the previous games is that the maps were relatively small, and the player had much less flexibility in terms of moving units around. Forcing friendly fire under those circumstances would have meant drastically increasing the games' difficulty.
In Telepath Tactics, however, the maps tend to be much larger, and it's way way easier to maneuver your units around. (Notably, you can move one unit a few steps, go move some other units, then come back and move the first unit some more.) So there's a lot of flexibility there. Friendly fire is something you can work around pretty effectively now, so it's staying in as a constant factor in battles.