FTC's Final Rule on Noncompetes: Recent Developments

Health Affairs has posted a new article by Erin C. Fuse Brown, Megha Reddy, and Christopher M. Whaley: "The FTC's Noncompete Rule: Legal Challenges And Potential Solutions For Physician Markets." It's a welcome comprehensive review of what the rule does and doesn't do and its current legal status. (My summary of the rule is here. (4/24/24)) It's well worth reading.

The article does a nice job of summarizing the August decision out of the Northern District of Texas, holding that the FTC's rule exceeds its statutory rulemaking authority and is arbitrary and capricious. Unlike another district court, which found the rule to be invalid but enjoined its enforcement only against the plaintiff in the case, the order in the Northern District case entered a nationwide injunction against the rule's enforcement. 

Although the trial court didn't cite the Supreme Court's Loper Bright decision (discussed here and here), the authors point out that the decision represents a Loper Bright-like refusal to accord any deference to the FTC's interpretation of its rulemaking authority. The FTC is "considering" an appeal. I hate to predict, but I'd be surprised if there's no appeal, although its appeal would be to the ultra-conservative Fifth Circuit Court of Appeals, where an affirmance would be likely, imho.