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In case you missed it, the NAM stood up for the protection of manufacturers’ intellectual property in a challenge to the Federal Trade Commission’s noncompete ban. A federal judge set aside the ban in August. 

What happened: The NAM’s amicus brief, in a case brought by several business groups, highlighted a crucial concern for manufacturers: that a ban on noncompetes would “hamstring innovation in the manufacturing sector and damage the competitiveness of American industry.”

• “Our brief focused on the arbitrary and capricious nature of the rule, specifically on the importance of protecting IP through noncompetes, since the value of a manufacturer’s brand often rests on its IP,” said NAM Deputy General Counsel for Litigation Erica Klenicki.

The NAM’s influence: Though the judge did not address this important consideration explicitly, her ruling did agree with the NAM’s legal reasoning.

• The judge “echoed our argument that the rule is arbitrary and capricious because it was not reasonably explained and failed to consider the positive benefits of noncompetes,” noted Klenicki.
• “This holding—which set aside the rule because it is arbitrary and capricious under the Administrative Procedure Act—follows the primary holding that the FTC lacks statutory authority to promulgate the rule.”

What’s next: The NAM Legal Center will keep working to safeguard manufacturers’ IP should the FTC appeal this decision and further pursue a sweeping noncompete ban.