The Federal Trade Commission promulgated regulations that stand to ban non-compete agreements in employment relationships nationwide. These regulations are scheduled to become effective on September 4, 2024.
Ryan LLC filed the first lawsuit seeking to enjoin the FTC’s regulations in the federal court for the Northern District of Texas. On May 7, 2024, Judge Brown denied Ryan’s request for expedited briefing and injunction and scheduled a hearing, if one would be required, for June 17, 2024, and forecast a ruling before July 3, 2024. Ryan v. FTC, USDC ND Tex. No. 3:24-CV-00986-E, Doc. 31. On June 13, 2024, Judge Brown decided that oral argument was not required and took the hearing off-calendar. Id., Doc. 148. Therefore, Judge Brown will decide the motion based on the papers submitted by Ryan, the FTC and several other parties who have filed papers joining one side or the other.
The United States Chamber of Commerce filed a similar lawsuit in the Eastern District of Texas. That lawsuit has been stayed, pending the briefing in Ryan. The Chamber of Commerce successfully moved to intervene as a plaintiff in Ryan.
Another active lawsuit was filed and is pending in the Eastern District of Pennsylvania, ATS Tree Services, LLC v. FTC, USDC ED Penn. No. 2:24-cv-01743. The Court in the ATS litigation scheduled a hearing for July 10, 2024, and indicated its intent to rule on ATS’s preliminary injunction request before July 23, 2024. Id., Doc. 15.
With these new regulations and all these challenges to them, it is not easy for employers to understand and analyze how to manage this issue currently.
