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A ruling by a federal judge in Texas striking down the Federal Trade Commission's ban on noncompete agreements in the workplace has set the stage for a battle that is likely to end up at the Supreme Court. The ruling, handed down shortly before the FTC ban was slated to go into effect on Sept. 4, restores the status quo for noncompete clauses, with any current noncompete agreements remaining in effect. U.S. District Judge Ada E. Brown of the Northern District of Texas ruled that the proposed ban is 'arbitrary and capricious' and exceeds the FTC’s statutory authority. Brown issued her ruling in a suit brought by Ryan LLC, a Dallas tax services provider represented by Gibson, Dunn & Crutcher and the Fillmore Law Firm which sought to overturn the ban. Other plaintiffs in the suit were backed by Sullivan & Cromwell and Bradley Arant Boult Cummings, and parties joining as amicus curiae are backed by Davis Polk & Wardwell, Seyfarth Shaw and Epstein, Becker & Green. Brown’s ruling bars enforcement of the FTC rule nationwide.

Florida

August 21, 2024, 2:46 PM