As we reported last week, the FTC voted to enact its Rule banning non-competes and the lawsuits quickly followed. Although three lawsuits have been filed so far, the lawsuit to watch is the United States Chamber of Commerce lawsuit filed in the United States District Court for the District of Texas. The FTC has appeared in the case and agreed to respond to the Chamber’s Motion to Stay and/or Enjoin the Rule by May 15th. The Chamber will then have until May 28th to file its reply in support of the Motion to Stay and/or Enjoin, and we expect the court to rule shortly thereafter. Accordingly, companies should know in June whether the Rule will be enacted (and thereby require companies to come into compliance within 120 days of the Rule being published in the Federal Register) or enjoined. As mentioned in the Q&A we sent out moments after the FTC voted to enact the Rule, we believe the Rule will be enjoined and therefore recommend that companies not take any action regarding the Rule at this time. We will issue a client alert as soon as the court enters its ruling. If you have any questions, please reach out to:
Scott Humphrey at shumphrey@beneschlaw.com or 312.624.6420.
Margo Wolf O’Donnell at modonnell@beneschlaw.com or 312.212.4982.
Charles Leuin at cleuin@beneschlaw.com or 312.624.6344.