On October 18, 2024, the Federal Trade Commission (FTC) initiated an appeal with the U.S. Court of Appeals for the Fifth Circuit, contesting the ruling issued by a Texas district court on August 20 in Ryan, LLC v. FTC, which blocked the FTC’s rule banning non-competes. As it stands, however, the Texas district court’s decision blocking the FTC’s rule from going into effect remains operative. A timeline for that appeal process has not yet been set.
In the meantime, the result of the recent Presidential election may mean a change in leadership at the FTC. It is possible (even likely) that the appeals process will not be complete when President Trump takes office. It is not certain how a new Chair nominated by the incoming administration would approach the FTC’s position on this matter. That said, it is worth noting that the two current Republican FTC members opposed the FTC’s non-compete rule in April 2024, with the vote split 3–2. It is possible a new Chair would reconsider moving forward with the pending appeal of the district court’s decision and/or align with the two opposing members to reverse the rule. How a potential new FTC Chair will approach the FTC’s rule and the pending appeal bears watching …