A judge in the U.S. District Court for the Eastern District of Pennsylvania declined on July 23 to halt the Federal Trade Commission’s (FTC’s) ban on noncompete agreements. The decision comes after the U.S. District Court for the Northern District of Texas earlier this month granted a preliminary injunction and postponed the effective date of the rule for the plaintiffs in that case.
“We’ve had two rulings and two different results. There is now total uncertainty facing employers, employees, and the employment market,” said John Siegal, an attorney with BakerHostetler in New York City. “Enforceability of the FTC rule banning noncompetes will not be determined by the date when the rule takes effect on Sept. 4,” he predicted.
We’ve gathered articles on the news from SHRM Online and other outlets.
In siding with the FTC in the noncompete challenge brought by ATS Tree Services, the Pennsylvania district court created a divide in the judiciary on the agency’s powers. The Pennsylvania judge said ATS Tree Services failed to establish it would eventually succeed on the merits of its case. Unlike the Texas plaintiffs, ATS did not seek a nationwide injunction. The Pennsylvania case is ATS Tree Servs. LLC v. FTC, E.D. Pa., 2:24-cv-01743.
The FTC has “the authority to promulgate rules prohibiting unfair methods of competition,” the Pennsylvania court wrote. The plain text of the Federal...
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