Court Denies Expanding Preliminary Injunction on FTC Non-Compete Rule
As reported in my previous article, Court Grants Preliminary Injunction Against FTC Ban on Non-Compete Agreements, the District Court granting the preliminary injunction from the FTC enforcing its ban on non-compete agreements limited the relief to only the plaintiff bringing the case, Ryan LLC, and not all business nationwide. I predicted that the Plaintiff would ask that the injunction be given nationwide effect when the court heard the merits of the case in August. On July 10, the Plaintiff and Plaintiff-Intervenors (Plaintiffs) filed a motion to reconsider the preliminary injunction ruling to expand it nationwide. Alternatively, they sought to apply the preliminary injunction to the members of the Plaintiff-Intervenor business associations in the case, the Chamber of Commerce of the United States, the Business Roundtable, the Texas Association of Business, and the Longview Chamber of Commerce, on associational standing grounds. The Plaintiffs reasoned that by limiting the preliminary injunction, all affected businesses must bear the expenses of preparing to comply with the FTC ban when it becomes effective on September 4, 2024, until the court decides the merits by August 30, 2024. Further, they noted, the court already ruled that the Plaintiffs have a likelihood of prevailing on their position that the FTC exceeded its authority in adopting the ban.
On July 11, 2024, the court denied the motion to reconsider in a one paragraph Order simply stating that the Plaintiff and Plaintiff-Intervenors “have not shown themselves entitled to the respective relief requested.” The Order doesn’t prevent the Plaintiff and Plaintiff-Intervenors from seeking a nation-wide permanent injunction when the court hears the merits of the case.
Another Challenge. In a separate case filed in a Pennsylvania district court in April, challenging the FTC ban, ATS Tree Services v. FTC, the court is expected to issue its ruling on the plaintiff’s motion for a preliminary injunction by July 23, 2024. That court could issue a nationwide preliminary injunction if it chooses.
Supreme Court to Decide? Ultimately, both cases are likely to be appealed by the losing party to the United States Court of Appeals for their respective judicial circuits (the Fifth and Third Circuits, respectively), once the merits are decided. Should the circuit courts have opposing opinions the cases might wind up before the United States Supreme Court to decide the fate of the FTC ban.
https://www.thebenefitofbenefits.com/2024/07/court-denies-expanding-preliminary-injunction-on-ftc-non-compete-rule/