On August 14, 2024, in Properties of the Villages, Inc. v. Federal Trade Commission, No. 5:24-cv-316-TJC-PRL, the United States District Court for the Middle District of Florida enjoined the Federal Trade Commission (“FTC”) from enforcing its non-compete rule (the “Rule”) against the plaintiff in the action. The court’s decision does not prevent the Rule from taking effect on September 4, 2024 as to everyone else.
The court’s decision, which it issued during oral argument, found that Properties of the Villages, Inc, (“POV”) had established a substantial likelihood of success on the merits because the Rule violates the major questions doctrine. The court noted that the major questions doctrine requires that when an administrative agency “claims to have the power to issue rules of extraordinary economic and political significance, it must point to ‘clear congressional authorization’ for the power it claims.” (Decis. at 15.) The court found that the doctrine applies where, as here, the Rule affects a significant portion of the American economy, regulates an area that has previously been the domain of state law, and is a significant expansion of the agency’s regulatory authority. (Id. at 17-19.) The court thus held that Section 6 of the FTC Act, upon which the FTC relies, insufficiently demonstrated “clear Congressional permission” to issue the Rule, and therefore, plaintiff had shown a likelihood of success on the merits. (Id. at 20-21.) The court also found that the POV’s...
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