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The Federal Trade Commission is expected today to approve a rule that would ban agreements commonly signed by workers not to join their employers’ competitors, which the agency says limit worker mobility and suppress their pay, our colleague Daniel Wiessner reports. FTC Chair Lina Khan said last year in announcing the proposal that “ending the practice would promote greater dynamism, innovation, and healthy competition.”
In proposing the rule last year, the FTC estimated that it could increase workers’ earnings by nearly $300 billion per year. The rule would require companies with existing noncompete agreements to scrap them and to inform current and past employees that they will not be enforced. California, Minnesota, Oklahoma and North Dakota have banned noncompete agreements and at least a dozen other states have passed laws limiting their use.
Major business groups representing an array of industries have criticized the proposal, saying noncompetes are a crucial way for companies to protect trade secrets and that they promote competitiveness. The U.S. Chamber of Commerce has already said it will sue the FTC as soon as tomorrow if the rule is approved. Neil Bradley, the Chamber’s chief policy officer, said the commission lacks the power to adopt rules banning noncompetes.
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- The U.S. Supreme Court declined to hear an appeal from a Pennsylvania lawyer who challenged an anti-harassment and anti-discrimination professional rule for lawyers in the state. Zachary Greenberg, an attorney with the non-profit Foundation for Individual Rights and Expression, sought to revive his lawsuit opposing the rule, which prohibited lawyers from knowingly engaging “in conduct constituting harassment or discrimination” based on race, sex, religion and other grounds.
- The U.S. Senate passed a bipartisan bill that would make all 10 temporary federal district court judgeships nationally permanent after the federal judiciary urged Congress to help it address workload demands in certain courts. Among the states with temporary judgeships are Texas, California and Florida. The Senate on a voice vote on Saturday approved a bill that would convert district court seats that Congress previously authorized for a limited time to permanent ones that would not eventually disappear should vacancies arise.
- Holland & Hart represents digital payment provider Koin Mobile in an antitrust lawsuit in Nevada federal court accusing casino operations company Everi of scheming to restrict competition for digital wallets. The complaint alleges Everi has used restrictive contracts and other means to keep rivals at bay and force casinos to use its wallet product.
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That is how many extra stores Kroger and Albertsons are adding to their planned sale of grocery stores in a bid to win regulatory approval for their proposed $25 billion merger, offering to divest a total of 579 stores to C&S Wholesale Grocers. The companies have been looking to offload stores to address regulators’ increasing concerns that the merger will lead to higher prices, store closures and job losses. The FTC and eight states sued to block the deal in February, saying it would raise grocery prices for millions of Americans. Read more.
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In a pair of new petitions to the U.S. Supreme Court, rideshare companies Uber and Lyft are asking the justices to bar state officials from using their enforcement power to seek money for workers or consumers who have signed arbitration agreements. The companies contend that the Federal Arbitration Act severely curtails the power of state AGs to sue for monetary recovery on behalf of anyone who has agreed to individual arbitration — a theory, writes Alison Frankel, that could have huge implications and is likely to rile state officials.
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“What’s so complicated about letting someone, somewhere, sleep with a blanket in the outside if they have nowhere to sleep?“
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- Donald Trump’s criminal hush money trial will resume in New York state court, where the former president is accused of breaking the law and corrupting the 2016 election by trying to cover up sexual encounters with a porn star and a Playboy model, while his defense lawyer said he committed no crime. The judge overseeing the trial will decide today whether the former U.S. president should be punished for violating a gag order that prevents him from criticizing witnesses and others involved in the case.
- The U.S. Supreme Court will weigh a challenge by Starbucks to a decision that required the coffee chain to rehire seven employees at one of its cafes in Memphis, Tennessee, who a federal agency determined were fired for supporting unionization. Williams & Connolly’s Lisa Blatt will argue for Starbucks, facing off against Austin Raynor of the DOJ’s solicitor general office for the National Labor Relations Board. Starbucks and a union seeking to organize the coffee chain’s U.S. workforce in February said they would create a “framework” to guide organizing and collective bargaining and potentially settle scores of pending legal disputes.
- In D.C. federal court, U.S. Magistrate Judge Moxila Upadhyaya will hold a status conference in a series of class actions accusing Visa and Mastercard of artificially inflated ATM fees. Consumers and independent, non-bank ATM operators make up the classes seeking billions of dollars in alleged damages. The U.S. Supreme Court last week turned down a bid from the defendants to strike down orders certifying the class actions. Visa and Mastercard have denied wrongdoing.
- U.S. prosecutors are due to file their sentencing recommendation for Samuel Miele, a former fundraiser for indicted ex-U.S. Representative George Santos. Miele last year pleaded guilty to defrauding campaign donors and will be sentenced next week in Long Island federal court. At a hearing in November, Miele admitted to impersonating a staffer for another member of congress in soliciting campaign contributions and to charging donors’ credit cards without their consent. Prosecutors are pursuing corruption charges against Santos, who was expelled from Congress last year. Santos has pleaded not guilty.
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Court calendars are subject to last-minute docket changes.
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- The FTC said it was suing to block Coach parent Tapestry’s $8.5 billion deal to buy Michael Kors owner Capri, a deal that the agency alleged would eliminate competition. Capri said in response that “market realities” show “this transaction will not limit, reduce, or constrain competition.” Tapestry said the FTC “fundamentally misunderstands both the marketplace and the way in which consumers shop.”
- The U.S. Supreme Court declined to decide whether delivery drivers for Amazon, Domino’s and a Flowers Foods subsidiary qualify for an exemption from mandatory arbitration of employment claims that the justices recently held applies to a broad range of industries. In a separate case, the court said it won’t hear an appeal by U.S. Soccer, leaving it to face an antitrust lawsuit that could open up the U.S. to official soccer matches involving foreign clubs.
- Baltimore city leaders filed a lawsuit against the owner and operator of the ship that collided with a pylon on the Francis Scott Key Bridge last month, causing its collapse and killing six people working on it at the time. The city’s claim filed in Maryland federal court seeks unspecified damages from the registered owner of the Singapore-flagged ship.
- Shipbuilding giants General Dynamics and Huntington Ingalls defeated a proposed antitrust class action accusing them of conspiring for years to suppress compensation for naval architects and marine engineers. Senior U.S. District Judge Anthony Trenga in Alexandria, Virginia, ruled the lawsuit was filed too late to overcome a four-year statute of limitations for antitrust claims.
- Gay dating app Grindr is facing a mass data protection lawsuit in London from hundreds of users who allegedly had their private information, including HIV status, shared with third parties without consent, according to law firm Austen Hays.
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- King & Spalding hired labor and employment partner Sydney Jones Lampard in D.C. from Kirkland. (King & Spalding)
- Shearman & Sterling brought on real estate partner Carolyn Stoner in New York, ahead of the firm’s planned merger with Allen & Overy to form A&O Shearman. Stoner was previously at Weil. (Shearman)
- Norton Rose Fulbright added investment funds partner Joshua Cohen to the firm’s Chicago office from Sidley Austin. (Norton Rose)
- Vinson & Elkins expanded its CFIUS practice with partner Randall Johnston. She previously was at Paul Hastings. (Vinson & Elkins)
- Walden Macht & Haran hired New York-based partner Barry Rashkover to a new securities enforcement practice. Rashkover arrives from Sidley. (Walden Macht & Haran)
- Finn Dixon & Herling brought on Zachary Moore in Stamford, Connecticut, as an investment management partner. He most recently was a managing director at investment firm Sixth Street. (Finn Dixon & Herling)
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