Will Court Block Non-Comp…

On April 23, 2024, the Federal Trade Commission (FTC) published a broad, controversial rule that seeks to prevent for-profit employers from entering and enforcing non-compete agreements with their employees and independent contractors. The rule is set to kick-in September 4, 2024, and employers must give notice of the new rule prior to that date. Three federal lawsuits, however, seek to stop the rule from taking effect.

Industry groups and the Chamber of Commerce quickly went to court after the FTC announced its rule, filing two lawsuits in Texas and another in Pennsylvania. One Texas case has been “stayed,” i.e., put on hold, in favor of the other Texas case (Ryan LLC v. FTC), which was filed first. In the Ryan case, Judge Ada E. Brown issued a briefing schedule on the plaintiff’s motion for a nationwide injunction, and she subsequently announced that she will make her decision without conducting a hearing or receiving oral arguments from the lawyers. Most important, she pledged to issue her ruling by July 3, 2024.

All eyes will be on the Earle Cabell Federal Building in Dallas next week as Judge Brown issues her opinion. If she grants the motion and issues an injunction, implementation of the rule will be delayed at the very least pending appellate review. If she denies the motion and allows the rule to move forward toward its September 4 effective date, expect the plaintiff and its supporters to seek an expedited appeal before the Fifth Circuit Court of Appeals in New Orleans.

Stay tuned as Wright Beamer and Now You Know It continue to provide the latest news concerning this unfolding story.

Recent Blog Posts

A Summertime Favorite

Non-Compete Ban Update

Non-Compete Ban Update