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Properties of the Villages, Inc. v. Federal Trade Commission

In April 2024, the Federal Trade Commission (FTC) found that noncompete clauses in employment contracts are unfair methods of competition and, therefore, issued a rule restricting use of noncompete clauses. A company called Properties of the Villages filed suit challenging the rule on several grounds. It then moved to stay the rule’s September 2024 effective date and to preliminarily enjoin the enforcement of the rule. Public Citizen, joined by National Employment Law Project (NELP), filed an amicus brief in support of the FTC. In a decision issued in August 2024, however, the district court granted the motion for preliminary injunction, limiting the injunction to the plaintiff only.

The FTC appealed the district court’s decision granting a preliminary injunction. Public Citizen and NELP filed an amicus brief in support of the FTC. The brief explains that the rule has a strong basis in the record, which shows that noncompete provisions lower wages and reduce job mobility, and are often imposed on workers without meaningful consent. The brief also explains that the FTC’s issuance of the Rule is within the FTC’s statutory authority under the FTC Act, and that the major questions doctrine does not compel a contrary conclusion.

Public Citizen and NELP also filed amicus briefs in similar cases in Texas and Pennsylvania.