The FTC held its meeting today, Thursday, September 19, 2024.
Although the FTC “invited members of the public to share feedback on the Commission’s work generally,” the only speaker to address the FTC’s noncompete rule was me. The rest were primarily (though not exclusively) franchisees complaining about franchisors, one in particular.
As planned, FTC Chair Lina Khan opened the meeting. But, rather than start with a statement (as indicated in the agenda), Chair Khan immediately asked the public to present their comments — each limited to two minutes.
I was the second speaker.
I kept my remarks as brief and as narrow as I could, and then spoke as quickly as I could. (Think Geico commercial auctioneer.1)
I made it almost to the end of my very short comment, but was cut off just before wrapping up.
My comments were as follows (noted as to where I was cut off):
Good morning. Thank you Chair Khan and Commissioners for the opportunity to speak with you today.
My name is Russell Beck. I am a trade secret, restrictive covenant, employee mobility lawyer at the law firm, Beck Reed Riden, in Boston. I handle matters involving noncompetes and trade secrets for companies and employees around the country.
I will be addressing the FTC’s noncompete rule. Specifically, I am asking the Commission to agree to dismiss the two remaining cases challenging the Rule in Pennsylvania and Florida.
As the Commission knows, the August 20th summary judgment ruling in Texas in the Ryan case set aside the Noncompete Rule and precluded the FTC from enforcing it. That ruling provided much-needed clarity to companies and employees around the country. And moving forward with the ATS Tree Services case will serve only to reinstate the confusion that existed before the Rule was set aside.
That uncertainty harmed everyone before – and it will harm everyone again. It cost companies around the country tremendous wasted time and resources – far in excess of the estimates set out in the notes to the Rule. And it resulted in general confusion among employees as well, some of whom thought – and sometimes acted on the mistaken belief – that their noncompete was invalid.
I understand from a filing last week in the ATS Tree Services case that “[t]he Commission . . . confirmed [that] it will not seek to enforce the Final Rule against ATS so long as the Ryan Judgment is effective as to ATS.” Continuing with the ATS Tree Services case will at best create a split as to whether the Commission can enforce the rule as to ATS or anyone else.
But, regardless, the Commission will necessarily violate the Ryan court’s ruling if it moves forward with the rule, even if it does so in reliance on the ATS case.
I am cognizant of Chair Khan’s statement to the House Committee on Energy and Commerce that the Commission “would proceed … in accordance with . . . court decisions that that come down.”
The only way to do so is to comply with the Ryan decision — CUT OFF
My remaining remarks would have simply noted that the FTC should avoid bringing back the needless confusion and waste of resources and offering to help the FTC as it considers options moving forward.
Oh well.
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[1] Mark Consigli reminded me of the ad I had in mind, but could not specifically recall and didn’t come up in my Google auctioneer ad search. This is a much more accurate representation of the speed of my comments: Fedex: Fast Talker (John Moschitta). Thank you Mark!