On April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 to approve a final rule banning non-competes with all workers 120 days after publication in the Federal Register, and invalidating existing non-competes with all workers except senior executives. Although the final rule abandons many aspects of the rule proposed in January 2023, the final rule represents a sea change in the law relating to non-compete clauses in the United States. Read the full Alert on the Duane Morris website.
FTC to Vote April 23 on Rule to Ban Noncompete Agreements
The Federal Trade Commission will vote at an open commission meeting to be held virtually on Tuesday, April 23, 2024, at 2:00 p.m. Eastern on its proposed rule banning employers from entering into noncompete agreements with workers. If issued, the final rule would go into effect 60 days following its publication in the Federal Register, and companies would have to be in compliance 180 days after publication. Read more on Duane Morris’ website.
SCOTUS Declines to Review Antitrust ATM Fee Dispute
On April 15, 2024, in Visa Inc., et al., v. National ATM Council, Inc., et al., No. 23-814 (Apr. 15, 2024), the U.S. Supreme Court declined a petition for review submitted by Visa Inc. (“Visa”) and Mastercard Inc. (“Mastercard”) urging the Supreme Court to resolve a circuit split over the correct standard of review courts should use when evaluating motions for class certification. Mastercard and Visa argued that the U.S. Court of Appeals for the D.C. Circuit erred by only requiring plaintiffs to show that questions common to the class predominate and allowing the fact finder to later address issues related to uninjured class members. The Supreme Court denied the petition for review.
The D.C. Circuit’s ruling in Visa v. National ATM Council is required reading for any corporate counsel handling antitrust class actions involving price-fixing allegations and underscores the importance of the standard of review used by courts when considering class certification. Read the full post on the Duane Morris Class Action Defense Blog.
Decertification Denied in Antitrust Home-Selling Commission Class Action
On March 26, 2024, Judge Stephen R. Bough of the U.S. District Court for the Western District of Missouri denied HomeServices of America’s (“HomeServices”) motion to decertify a class of home sellers alleging that that Defendants violated the Sherman Act by entering into a conspiracy to follow and enforce a rule adopted by the National Association of Realtors (“NAR”) that had the effect of raising commission rates in Moehrl et al. v. The National Association of Realtors et al., No. 1:19-CV-01610 (W.D. Mo. Mar. 26, 2024). HomeServices argued that the class of plaintiffs fail to satisfy Rule 23(b)(3) because trial showed that individual facts and proof predominated over common issues. The Court accepted Plaintiffs’ arguments that its expert sufficiently demonstrated a but-for world through common evidence, satisfying the predominance requirement of Rule 23(b). Moerhl is required reading for any corporate counsel handling antirust class actions involving price-fixing allegations.
Read more on the Duane Morris Class Action Defense Blog.
White House Announces New Strike Force on Unfair and Illegal Pricing
The federal government is taking a more aggressive approach to lowering prices and costs for American consumers. On March 5, 2024, President Joseph Biden announced a new Strike Force on Unfair and Illegal Pricing co-chaired by the Department of Justice (DOJ) and Federal Trade Commission (FTC). The strike force is yet another attempt by the federal government to implement the president’s July 2021 Executive Order on Promoting Competition in the American Economy.
Guidance for Controlling Drug Prices
The Federal Trade Commission (FTC) has announced its support of the federal government’s use of “march-in rights” as a mechanism to control the price of pharmaceuticals. The National Institute of Standards and Technology (NIST) late last year issued its “Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights” that would fundamentally change the use of march-in rights by allowing the government to exercise price control under the Bayh-Dole Act, which the FTC announced its support for last week. This shift is the latest effort by federal agencies to lower drug prices in the wake of President Joe Biden’s Executive Order on Promoting Competition in the American Economy.
Is Misclassification of Workers an Unfair Method of Competition?
The Federal Trade Commission (FTC) is signaling its intent to get further involved in employment practices after its activity of the last year and a half in proposing a ban on noncompete clauses in employment contracts and signing a memorandum of understanding with the U.S. Department of Labor (DOL) to bolster the FTC’s efforts to promote competitive U.S. labor markets.
New Bill Keeps Predictive Tech Under Scrutiny with Price Fixing
Several Democratic senators introduced a bill intended to stop companies from utilizing predictive technology to raise prices. Businesses are increasingly delegating important competitive decisions, including price-setting power, to artificial intelligence, algorithms, and other predictive technology software. Read more on the Duane Morris Artificial Intelligence Blog.
Preserve Materials During Pendency of Antitrust Investigation, FTC Says
Companies and individuals must be aware of their legal obligations to preserve communications when involved in government investigations or litigation, especially in light of new preservation standards from the Federal Trade Commission and Department of Justice. Due to concerns with the increased use of collaboration tools like Microsoft Teams and ephemeral messaging applications like Signal, the agencies are updating the language they include in standard preservation letters and requests for information, including second requests, voluntary access letters, civil investigative demands, other compulsory legal processes and grand jury subpoenas.
Senator Echoes FTC’s Focus on Improper Listings and Anticompetition
In January, Senator Tammy Baldwin (D-WI) sent letters to companies warning of improper Orange Book listings of patents for inhalers, following up on the FTC’s focus on potential anticompetitive harm of improper listings. According to Senator Baldwin’s letters, the recipients of the letters were warned by the FTC in November regarding the listing of inhaler patents, but have not removed the patents from the Orange Book. The letters follow an investigation launched earlier this month by the Senate Committee on Health, Education, Labor, and Pensions (of which Senator Baldwin is a member) into the prices of inhalers.