On July 3, Judge Ada Brown of the US District Court for the Northern District of Texas issued a ruling in the lawsuit filed by Dallas tax service firm Ryan LLC (Ryan, LLC v. The Federal Trade Commission). The judge granted a preliminary injunction, halting the FTC's non-compete ban for the plaintiffs named in the lawsuit. Alongside Ryan LLC, additional plaintiffs included the US Chamber of Commerce, Business Roundtable, the Texas Association of Business, and Longview Chamber of Commerce. Surprisingly, the Court did not extend this injunction nationwide, meaning the FTC's ban remains on track and set to take effect on September 4 for employers not named in the Ryan case.
The Court determined the FTC likely overstepped its statutory authority by imposing a broad ban on non-compete agreements, citing concerns that such a rule could be unlawful and arbitrary without sufficient justification. While critical of the FTC's approach, the Court refrained from imposing a broader injunction beyond the immediate parties involved.
The implications of this decision will unfold in the coming months. The named parties are required to submit a joint status report by July 9, allowing the Court to determine the next steps in the case. Furthermore, Judge Brown stated, "While this order is preliminary, the Court intends to rule on the ultimate merits of action on or before August 30." Depending on this final decision, a broader injunction affecting all employers could still be issued. However, businesses should continue to prepare for the September 4 deadline until further developments arise.
Attention will also turn to a parallel case brought by a tree care provider in Pennsylvania, ATS Tree Services, which is scheduled to be heard on July 10. This case leaves open the possibility of a nationwide injunction being issued later this month.
The National Association for Home Care & Hospice (NAHC) will continue to monitor developments and forward information as it becomes available.
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Kristen Wheeler
Executive Director of Private Duty at NAHC
National Association for Home Care & Hospice
Washington DC
+1 (202) 547-7424
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