Seyfarth Synopsis: The federal district court for the Northern District of Texas has issued an order in the Ryan case staying the effective date on a nationwide basis the Federal Trade Commission (FTC) Rules banning noncompete agreements (the “Rule”), as well as enforcement of the Rule. However, legislatures and agencies at the federal and state
This post was originally published to Seyfarth’s Trading Secrets blog.
Once again surprising the country by acting ten days before her own self-appointed deadline, a federal judge in the United States District Court for the Northern District of Texas issued a ruling on August 20 in the Ryan v. FTC case setting aside the FTC Rule banning non-competes, and held (quoting Fifth Circuit precedent) that the ruling had “nationwide effect” that is “not party restricted” and “affects persons in all judicial districts equally.” This will undoubtedly elicit an immediate appeal from the FTC.
The Court’s reasoning is almost word-for-word identical to its Order staying the FTC Rule on July 3, 2024 (which we analyzed here). The Court once again limited its ruling to conclude that the FTC violated the APA because “[1] the FTC exceeded its statutory authority in implementing the Rule, and [2] the Rule is arbitrary and capricious.”Continue Reading Federal Texas Court Sets Aside with “Nationwide Effect” the FTC Rule Banning Non-Competes
Seyfarth Synopsis: The FTC approved a final rule to implement a nationwide ban on non-compete agreements between employers and their workers. The rule would supersede most state laws regarding noncompete provisions except where a state law prohibition is stricter.
On April 23, 2024, the Federal Trade Commission (FTC) approved in a 3-to-2 vote a