In our recent alert, we noted that while a Texas
federal court's decision in Ryan LLC v. FTC to
preliminarily enjoin the FTC's noncompete rule applied only to
the parties in the case, there was still potential for a broader
preliminary injunction to be granted in another case –
ATS Tree Services LLC – being heard in the U.S.
District Court for the District of Eastern Pennsylvania. That
possibility has been rejected. On July 23, 2024, Judge Kelley
Brisbon Hodge in ATS Tree Services denied the motion for
preliminary injunction outright, finding that ATS Tree Services was
unlikely to succeed on the merits of its claim, and could not show
irreparable harm.
Other challenges to the FTC rule are still pending, leaving the
future of the noncompete ban still very much up in the air. And as
previously explained, a final ruling – and potential
nationwide injunction – is expected in the Ryan LLC
case by August 30, 2024 (but only days before the Final Rule's September 4,
2024 effective date). Much could happen over the next
several weeks, but employers should begin preparing for compliance
with the Final Rule's notice requirements, and more generally
for a landscape without noncompetes for most of their
employees.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.