Non-Compete Agreements

August 20, 2024

Another Federal Court Issues Preliminary Injunction against the FTC’s Non-Compete Ban Rule

by Salvatore Gangemi of Murtha Cullina LLP

Last week, on August 14, 2024, a Florida federal court addressed the Federal Trade Commission’s (FTC) non-compete ban in Properties of the Villages, Inc. v. Federal Trade Commission and entered a limited preliminary injunction preventing the rule from taking effect and limited the preliminary injunction to the parties in the case. The court based its decision on the “major questions doctrine,” which prevents a federal agency from issuing substantive rules without express congressional authorization where such rules would have “extraordinary economic and political significance.” Indeed, the court found that the FTC rule would significantly impact the economy by modifying an area of law that has always been the province of state law.

This decision follows the lead of the United States District Court for the Northern District of Texas, which issued a preliminary injunction preventing the rule from taking effect, but only regarding the plaintiff in the case of Ryan LLC v. Federal Trade Commission.

Read on for more information in this blog post.

July 24, 2024

Pennsylvania Federal Court Refuses to Prevent FTC Non-Compete Ban from Taking Effect

by Salvatore Gangemi of Murtha Cullina LLP

Earlier this month, we wrote about a Texas federal court’s issuance of a limited preliminary injunction staying the Federal Trade Commission’s (FTC) rule banning non-compete clauses for the plaintiffs in that case. Despite not issuing a preliminary nationwide ban, the Texas federal court stated it would render a final decision on August 30, 2024, before the rule becomes effective on September 4, 2024. Based on language contained in the Texas federal court’s opinion on the preliminary injunction, it appears likely that the Texas federal court will ultimately issue a permanent injunction, effectively killing the FTC’s non-compete ban.

However, on July 23, 2024, a federal court in Pennsylvania refused to follow the Texas court’s lead and decided not to enjoin the FTC’s non-compete ban temporarily. Unlike the Texas federal court, the Pennsylvania federal court ruled that the plaintiff did not satisfy its burden of establishing the need for a preliminary injunction.

Read the full blog post.

July 9, 2024

Texas Federal Court Issues Preliminary Injunction against FTC Non-Compete Ban Rule

by Salvatore Gangemi of Murtha Cullina LLP

We previously wrote about the Federal Trade Commission’s (FTC) issuance of a rule banning non-compete clauses in employment. The FTC’s issuance of its final rule banning non-compete clauses constituted an unprecedented intrusion into matters of state law, which governed non-compete clauses. Nevertheless, it appears now that the FTC’s non-compete ban is beginning to unravel.

Last week, the United States District Court for the Northern District of Texas in Ryan LLC v. Federal Trade Commission, issued a preliminary injunction against the Federal Trade Commission’s rule banning non-compete clauses in employment. Read the full blog post here.

April 25, 2024

FTC Issues Final Rule Banning Non-Compete Clauses

by Salvatore Gangemi of Murtha Cullina LLP

Two days ago, the Federal Trade Commission (FTC) issued its “Final Rule” banning non-compete clauses in employment. Until now, the FTC never officially declared that such clauses constituted an “unfair method of competition.” The Final Rule seeks to upend centuries of state law governing the use of non-compete clauses in employment, including state laws that already limit or ban their use. The federal government’s encroachment into traditional state law is not necessarily unprecedented, but in this case, will likely fail.

Read on for more information in this blog post.