When last we left this dramatic saga, we had a decision from a federal court in Texas indicating that the Federal Trade Commission (FTC) regulations effectively banning most non-compete agreements would not be found enforceable due to the “major questions” doctrine. Then we had the U.S. Supreme Court decide in the Loper Bright decision that “Chevron deference” no longer exists and any federal agency would have to show a specific statutory basis for its actions. This only reinforced the notion that the FTC could not invalidate approximately 40 million non-compete agreements through the ordinary regulatory process. A recent Florida federal court decision agreed with the Texas court.

But wait!  A Pennsylvania federal court very recently ruled that the other federal courts have it all wrong. Of course, the FTC can ban non-competes, so says this court.

On Tuesday, August 20, the Texas Ryan court let fly with the jaw-buster—a national injunction against the FTC non-compete rule!

So now we have conflicting federal court decisions—the proverbial “circuit split”—that often leads to U.S. Supreme Court review. Count on an immediate appeal by the FTC.

For now, employers can take a breath and enjoy a sigh of relief. September 4 will come and go without any national change in U.S. non-compete law. However, the final word on this saga will be likely be written by the U.S. Supreme Court.

If you have questions, please contact David J. Carr or another member of the Workplace Solutions Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.