Employers Score Another Win Against FTC, But Noncompete Ban Looms
Topics: Court Decisions, Non-Compete and Trade Secrets
In July, this blog alerted you to the outcome of the preliminary injunction rulings in Ryan, LLC v. Federal Trade Commission and ATS Tree Services, LLC v. Federal Trade Commission, which resulted in a 1-1 tie between employers and the FTC. On August 14, 2024, employers won another limited injunction prohibiting the FTC from enforcing the ban against the plaintiff, Properties of the Villages, Inc. Properties of the Villages, Inc. v. Federal Trade Commission. Thus far, each employer victory is narrowly applied to the parties related to the immediate case. A nationwide ban or injunction is not in effect.
Therefore, all eyes are focused on Texas, as the Ryan court indicated that it would make a final decision on August 30, 2024. That decision may have more far-ranging implications.
Planning Ahead – Hope for the Best, Prepare for the Worst
As the litigation continues, employers should understand that unless a broader injunction is issued before September 4, 2024, the FTC's ban on noncompete agreements, including providing notices to employees and former employees will be the law of the land and employers should prepare accordingly.
Employers that utilize noncompete agreements should continue to monitor legal developments closely and consult with legal counsel, including CDF’s Trade Secret Practice Group leaders, Dan M. Forman and Ashley A. Halberda, to prepare for the worst while hoping for the best outcome.
