Search
The Employer Handbook Blog
🚨 The Supreme Court Just Took Aim at Nationwide Injunctions. Could the FTC’s Noncompete Rule Rise from the Dead?
Most people didn’t connect the dots between last week’s Supreme Court decision in Trump v. CASA and the FTC’s ban on noncompetes.
But maybe they should.
The Court’s ruling didn’t mention employment law. It didn’t say a word about the FTC. But it did take a wrecking ball to the kind of court order that’s currently keeping the FTC’s rule on ice. And that could matter—eventually.
⚖️ TL;DR: The Supreme Court just said lower courts can’t issue nationwide injunctions unless they’re granting class-wide relief or narrowly protecting specific plaintiffs. That could make the August 2024 injunction blocking the FTC’s noncompete rule legally vulnerable—because that order wasn’t tied to a class and applied nationwide.
So is the rule suddenly back in force? No. But the legal foundation under the injunction just got a lot shakier.
📌 Editor’s Note (June 30, 2025):
A prior version of this post suggested that the Supreme Court’s decision in Trump v. CASA undermines the nationwide relief granted in Ryan LLC v. FTC. While CASA does limit lower courts’ authority to issue universal injunctions, Footnote 10 makes clear that the decision does not resolve whether courts may vacate agency action under the Administrative Procedure Act. Because the Ryan court set aside the FTC’s rule under 5 U.S.C. §706(2), CASA may not affect that ruling as directly as originally suggested. The main post has been left unchanged to preserve the original analysis.
🔍 What the Court Actually Said
In Trump v. CASA, the Court ruled that federal courts lack the equitable authority to issue “universal” (a.k.a. “nationwide”) injunctions unless:
- The plaintiffs represent a certified class under Rule 23, or
- The relief is narrowly tailored to protect only the plaintiffs with standing.
According to the Court, nothing in the Judiciary Act of 1789—or historical equity practice—authorizes district judges to block federal laws or policies for everyone.
That’s a big deal, especially for cases where a single plaintiff has managed to freeze a federal rule nationwide. Going forward, that kind of all-purpose injunction is off the table.
🧠Why This Might Matter for the FTC’s Noncompete Rule
In August 2024, a federal court in Texas issued final judgment in Ryan LLC v. FTC, setting aside the FTC’s noncompete rule and enjoining its enforcement across the board. That relief was nationwide. The plaintiffs were not a certified class.
Under the Supreme Court’s new ruling, that’s a problem.
The Court made clear in CASA that this kind of sweeping relief exceeds a district court’s equitable authority—unless class certification or complete-relief necessity is involved. And neither was present in Ryan.
So while the FTC’s noncompete rule remains blocked for now, the decision in CASA gives the FTC (or DOJ) a ready-made argument to go back to court and ask for a narrower injunction. If they do, the rule could spring back to life—at least outside of Ryan LLC.
📉 What’s Still Allowed After CASA
| Type of Injunction | Permissible Post-CASA? | Conditions |
|---|---|---|
| Individual/party-specific | âś… Yes | Must be narrowly tailored to the actual plaintiffs with standing |
| Rule 23 class-wide | âś… Yes | Requires certified class under Federal Rule of Civil Procedure 23 |
| Universal/Nationwide (without a class) | ❌ No | Exceeds equitable authority that Congress has given to federal courts |
⏳ So Why Is the Rule Still Blocked?
Because Trump v. CASA doesn’t automatically change anything. The Ryan injunction is still on the books—overbroad or not. And unless the FTC asks the court to revisit it, the nationwide block remains in place.
Which raises another question: Will the FTC do anything?
Probably not. The current administration doesn’t appear interested in reviving the noncompete rule—and if it’s content to let the rule die under judicial pressure, there’s no incentive to go back to court to narrow the injunction. The agency may simply let it stand and move on.
🔎 What Employers Should Watch For
- The Ryan injunction continues to block the FTC rule nationwide, even though its scope likely exceeds what CASA now permits.
- The FTC has legal grounds to ask the court to limit the injunction—but don’t bet on it.
- If a future administration tries to bring the rule back, it will have to navigate a more complex legal and procedural landscape than before.
đź’ˇ Final Thought
The Supreme Court didn’t reinstate the FTC’s noncompete rule. But it did pull the legal rug out from under the nationwide injunction that blocked it.
The rules are still down. But employers should understand that their status now rests more on prosecutorial discretion than solid legal footing.