In direct conflict with a recent Texas court ruling, on July 23, an Eastern District of Pennsylvania court denied ATS Tree Services’ motion for a preliminary injunction to stay the effective date of the Federal Trade Commission’s (FTC) noncompete ban. The ATS court limited application of its decision to the plaintiff, but its holding — “the FTC is empowered to make both procedural and substantive rules as is necessary to prevent unfair methods of competition” — conflicts with the Texas federal court’s conclusion that “the FTC lacks the authority to create substantive rules.” The Texas court intends to rule on the merits of its case by August 30, just four days before the ban’s effective date. While it seems likely that the Texas court will strike down the noncompete ban, given that this decision may not come down until the eve of the ban (and may not ultimately rule in favor of plaintiffs), employers should take steps now to prepare for the possibility of the ban becoming effective right after Labor Day.Continue Reading Pennsylvania Court Denies Injunction Against FTC’s Noncompete Ban

As workers were leaving their offices for the Fourth of July holiday, the Northern District of Texas issued its much-anticipated order preliminarily enjoining the effective date of the Federal Trade Commission’s (FTC) controversial noncompete ban rule. The court’s decision, however, is limited to the named plaintiffs — a tax accounting firm and several business groups — in the case. Although the stay is temporary pending the court’s final decision on the merits of the case and applies only to the movants in the case, it signals that a permanent and nationwide injunction is likely.Continue Reading Texas Court Temporarily Enjoins FTC Noncompete Ban Rule