Ryan, LLC v. Federal Trade Commission

In 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 Ryan, LLC filed suit challenging the rule on several grounds, and the Chamber of Commerce and other business associations intervened to challenge the rule as well.

Ryan and the intervenors 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. The district court, however, granted the motions for preliminary injunction, although it limited the injunction to the plaintiff and intervenor-plaintiffs only.

The parties then filed cross-motions for summary judgment. Public Citizen and NELP again filed an amicus brief in support of the FTC. Our amicus brief explains that the rule has a strong basis in the record, which shows that noncompete provisions lower wages and reduce job mobility, and that they are often imposed on workers without meaningful consent. The brief also explains that the FTC Act provides statutory authority for the rule and that the rule is not retroactive. The district court, however, granted the plaintiffs’ motions for summary judgment and set aside the rule.

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