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.