July 25, 2024
Non-Competes: Eastern District of Pennsylvania Sides with FTC on Ban
Put this in the category of “nothing is ever easy.” There’s a new development in the multiple cases challenging the FTC’s broad non-compete ban. As reported by Bloomberg, the US District Court for the Eastern District of Pennsylvania found that the FTC “has clear legal authority to issue ‘procedural and substantive rules as is necessary to prevent unfair methods of competition'” and denied a tree trimming company’s motion for a stay of the effective date and a preliminary injunction.
This decision seems to directly conflict with an early July order by a federal judge in Texas granting a tax services firm’s motion for a preliminary injunction of the ban (which was limited to the plaintiffs and plaintiff-intervenors) — creating a divide in the judiciary. The article says, “a real estate firm in The Villages, Fla., is also pursuing a lawsuit over the rule in the Middle District of Florida.”
This Troutman Pepper alert says, “employers should take steps now to prepare for the possibility of the ban becoming effective right after Labor Day.” While the Texas court plans to issue a ruling on the merits by August 30, that is only four days before the ban’s effective date.
– Meredith Ervine