As reported in our prior Alert, on April 23, 2024, the Federal Trade Commission (FTC) voted 3-2 to approve a final rule banning noncompete agreements with all workers 120 days after publication in the Federal Register (i.e., on September 4, 2024), and invalidating existing noncompetes with all workers except senior executives. Ryan LLC, a national tax preparation service, filed suit challenging the FTC’s noncompete ban shortly after it was issued. The U.S. Chamber of Commerce and other business associations later joined the lawsuit. The parties challenging the noncompete ban filed motions to stay/enjoin the ban. Following briefing, the court indicated that it would decide the motions to stay/enjoin the noncompete ban without requiring a hearing. On July 3, 2024, the U.S. District Court for the Northern District of Texas enjoined the FTC from enforcing its noncompete ban against the plaintiff and plaintiff-intervenors in the Ryan lawsuit and stayed the noncompete ban as to those parties, but refused to issue a nationwide injunction or stay that would apply to other employers, see the court opinion. The court also refused to extend the scope of the injunction and stay of the noncompete ban to members of the U.S. Chamber of Commerce.
Read the full Alert on the Duane Morris LLP website.