Interested in the fate of the legal challenges to the Federal Trade Commission (FTC)’s proposed non-compete ban?
Yesterday, a Florida federal court granted a plaintiff company’s motion for preliminary injunction enjoining the FTC from enforcing the new non-compete rule against that plaintiff.
Relying on recent jurisprudence from the Supreme Court, and in combination with the breadth and scope of the FTC’s final rule, the court concluded that it is required to consider the final rule in the context of the major questions doctrine. Under that doctrine, the relevant questions are whether the FTC Act grants the FTC the authority to issue the non-compete rule and does the rule implicate a major question?
The Court held that given the sweep and breadth of the final rule, there was a substantial likelihood that it presents a major policy question. As such, the FTC would need to show clear Congressional authorization for the power it claims. As such, plaintiff showed a likelihood of success on this issue, warranting the injunction.
Stay tuned as we inch closer to September 4 (the date the FTC noncompete ban is supposed to take effect).