FTC's Non-Compete Ban Temporarily Stayed On Limited Basis

A Texas federal district court issued its promised decision on July 3, temporarily staying the FTC's Non-Compete Rule (Rule) in Ryan LLC v. Federal Trade Commission as applied to the Plaintiff and the Plaintiff-Intervenor organizations¹ only. The opinion previews how the court is likely to rule on the merits, which it has promised to do by August 30, prior to the Rule's effective date of September 4. Notably, in addition to not reaching non-Plaintiffs, the court declined to issue a preliminary injunction that extended to the members of the U.S. Chamber of Commerce or the three other business organizations in the case.

The Decision

The court's decision granted the Plaintiffs' request for a preliminary injunction of the Rule pending a decision on the merits. In granting the preliminary injunction, the court held that the Plaintiffs were likely to show that the Rule violates the Administrative Procedures Act (APA)² because both 1) the FTC exceeded its statutory