Yesterday, a third court weighed in on the FTC’s proposed ban on non-competes, set to go into effect on September 4, 2024. Judge Corrigan of the United States District Court for the Middle District of Florida granted the plaintiff Properties of the Villages, Inc.’s (“POV”) motion to stay the effective date of the rule and preliminarily enjoin its enforcement.
Continue Reading More Bad News for the FTC: Federal Court in Florida Enjoins Enforcement of Non-Compete Ban
Yesterday, the Court in the ATS Tree Services v. FTC case denied Plaintiff ATS Tree’s Motion to Stay and Enjoin the FTC’s recent ban on non-compete agreements (the “Final Rule”), because, the Court held, ATS Tree failed to establish irreparable harm and a likelihood of success on the merits. This puts this court’s ruling in direct conflict with the July
Continue Reading Federal Court in Pennsylvania Creates District Split on Enforceability of FTC Non-Compete Ban
The FTC’s recently issued Final Rule banning non-competes for most workers prohibits an employer from (1) threatening to enforce a non-compete against a worker, (2) advising the worker that, due to a non-compete, they should not pursue a particular job opportunity, or (3) telling the worker that the worker is subject to a non-compete.[1] The FTC asserts that these
Continue Reading The FTC’s “Good Faith” Exception to the Non-Compete Ban: Pending Legal Challenges Are Not a Basis for Non-Compliance
The FTC’s Final Rule banning non-competes in worker agreements contains a noteworthy exception that its provisions “do not apply where a cause of action related to a non-compete clause accrued prior to the effective date.”[1] The “existing cause of actions” exception, codified as Section 910.3(b), is a new addition that was not included in the FTC’s proposed rule issued
Continue Reading Cutting Off Claims – When Does the FTC Non-Compete Ban Allow for Accrued Actions?
On May 3, 2024, the United States District Court for the Eastern District of Texas entered an Order staying the proceedings in Chamber of Commerce v. FTC by granting the FTC’s motion to apply the first-to-file doctrine, in which a district court should generally order “stay, transfer, or dismissal” of a second-filed action that substantially overlaps with a pending, first-filed
Continue Reading FTC Non-Compete Ban Lawsuits Update: Eastern District of Texas Stays Chamber of Commerce Suit in Favor of Ryan LLC as First-to-File
On April 23, 2024, the Federal Trade Commission (FTC) voted in a 3 to 2 decision along party lines to adopt its Final Non-Compete Clause Rule (“Noncompete Rule”) banning post-employment non-compete clauses between employers and their workers. The Noncompete Rule is scheduled for publication in the Federal Register on May 7, 2024, giving the rule an Effective Date of
Continue Reading Analysis of FTC Non-Compete Ban Legal Challenges: Does the Ban Pass Constitutional Muster? (And Other Issues)
On March 21, 2024, the Federal Deposit Insurance Corporation (“FDIC”) approved a Federal Register notice seeking public comment on its proposal to revise its current Statement of Policy on Bank Merger Transactions. Among the proposed revisions, the agency’s proposal will prohibit non-compete agreements in bank mergers in which the selling bank is required to divest all or a portion
Continue Reading FDIC Updates Bank Merger Guidance to Include Non-Compete Ban
In Direct Biologics L.L.C. v. McQueen, et al., the U.S. Court of Appeals for the Fifth Circuit vacated a lower court’s dismissal of a trade secret and restrictive covenants suit, but nonetheless stressed the need for movants seeking a preliminary injunction in trade secrets cases to provide specific evidence of the irreparable harm caused by both actual and potential
Continue Reading Fifth Circuit Spares Trade Secrets Suit, But Clarifies That Specific Evidence of Irreparable Harm Must Support Request for Preliminary Injunction
The Federal Trade Commission (FTC) recently set its sights squarely on non-compete agreements in merger transactions, making them ripe for further scrutiny. In a Consent Order issued June 14, 2022, the FTC ordered GPM Investments LLC and its parent company ARKO Corp. to roll back provisions it deemed “anticompetitive” in GPM’s May 2021 acquisition of 60 Express Stop retail fuel stations from Corrigan Oil Company. Under the FTC’s order, ARKO and GPM agreed to limit the non-compete agreement that it imposed on Corrigan, and return five retail fuel stations in several local Michigan markets. This decision comes on the heels of a June 10th statement by the FTC’s Chair Lina M. Khan, joined by Commissioners Rebecca Kelly Slaughter and Alvaro M. Bedoya, warning businesses that contract terms in merger agreements that potentially impede fair competition would be highly scrutinized.
Continue Reading FTC Further Scrutinizes Use of Non-Competes in Merger Transactions