By Greg Care

This will likely be my final update on the litigation over the Federal Trade Commission’s (FTC) rule banning nearly all employment non-compete provisions nationwide. This series draws to a close in the way I’ve predicted since the Trump Administration came into power: the FTC is abandoning the non-compete rule.

The last several days have had some interesting developments.

On September 2, the federal appeals court in D.C. issued an important decision regarding President Trump’s termination of one of the Democrat FTC Commissioners (who supported the non-compete rule). Commissioner Rebecca Kelly Slaughter had sued Trump, claiming that her termination was illegal. A lower court ruled that she was right and ordered that she be reinstated. The D.C. Circuit temporarily stayed that order but, last Tuesday, decided that the stay must be lifted because binding Supreme Court precedent prohibited the termination of Commissioner Slaughter. (On September 8, Chief Justice Roberts granted another stay, putting the Commissioner back on the sidelines.)

However, even Commissioner Slaughter’s short-lived reinstatement was not enough to stave off what seemed like an inevitability, as I’ve discussed before. Despite the second Democrat seat on the FTC being vacant, the agency’s leadership has gone forward with a vote (3-1) to abandon the non-compete rule.

Consistent with that, this past Friday, September 5, the FTC filed motions to dismiss the two appeals that were filed under the Biden Administration to defend the validity of the rule. Without any realistic prospect that the motions will be denied, the rule will die without ever having been given the opportunity to right the wrongs for which it was created. Two FTC Commissioners who voted against the non-compete rule issued a joint statement claiming that the agency will, instead, pursue individual enforcement actions.

It is dubious that the agency has the resources to have a meaningful effect on this pervasive problem on an individual, case-by-case basis. We shall see.

In the meantime, the key remains to look to state and local law for protection from unnecessary and/or overbroad non-competes.

If you have questions regarding non-competes in your situation, please contact us today to see if we can assist with your particular circumstances.

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