On August 20, 2024, the federal judge in the Ryan, LLC lawsuit in Texas issued an order holding as unlawful and setting aside the Federal Trade Commission’s (“FTC”) worker non-compete rule (“Final Rule“). Importantly, the set aside remedy is nationwide in scope, which means the Final Rule “shall not be enforced or otherwise take effect on its [intended] effective date of September 4, 2024, or thereafter.”
As we commented earlier this week in our Properties of the Villages, Inc. article, national focus was shifting back to the Ryan, LLC case because a ruling based on a full evidentiary record was expected on or before August 30 and the plaintiffs were seeking a nationwide set aside remedy.
The Court’s decision in Ryan, LLC was issued 10 days ahead of schedule. A more extensive analysis will be covered in a future article. For now, the key takeaways from Ryan, LLC are as follows: i) the FTC exceeded its statutory authority in issuing the Final Rule; ii) the Final Rule is arbitrary and capricious; iii) the proper remedy was for the Court to “hold unlawful” and “set aside” the Final Rule; and iv) the set aside remedy has “nationwide effect[,]” as opposed to being party-specific.
The Court’s order is a final, appealable judgment. Therefore, if the FTC wants to challenge the ruling, it would be required to take it up on appeal to the 5th Circuit Court of Appeals within 30 days. The 5th Circuit is considered to be a more conservative court of appeals, which would make for tougher headwinds for the FTC.
Practical Takeaways
As before, the practical takeaways remain consistent with those described in our recent articles.
- Work Closely with Counsel: A strategic communications strategy is still recommended to help avoid confusion in a rapidly evolving and misunderstood legal landscape.
- Stay Informed: Check back on our website for additional analyses and status updates on a possible appeal by the FTC to the 5th Circuit Court of Appeals.
If you have any questions on issues discussed in or related to this post, please contact:
- John Bowen at (317) 429-3629 or jbowen@hallrender.com;
- Dana Stutzman at (317) 977-1425 or dstutzman@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
