Drew Valentine

In a significant development, a Texas federal court has put a halt to the FTC's non-compete ban. Learn more about this breaking news in Lowenstein Sandler LLP's latest Employment client alert. #noncompetes #employmentlaw #employment #employers #lawyers

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In a courtroom in southern Texas this morning, a judge moved to dismiss Welsh, Carson, Anderson & Stowe (WCAS) as a defendant in the FTC’s case against US Anesthesia Partners (USAP).  The complaint, filed by the FTC in September 2023, alleged that USAP and WCAS executed a multi-year anticompetitive scheme to consolidate anesthesia services in Texas, resulting in tens of millions in increased costs annually to patients. Although the lawsuit will continue against USAP, WCAS’s dismissal has significant implications for the private equity industry nationwide. If WCAS had been held liable for the actions of its portfolio company (of which WCAS maintains only a minority stake), it would set a concerning precedent for investors – i.e. that you are liable for your portfolio companies’ actions regardless of your role in their strategy and operations or level of equity. Turning the lens towards life sciences, such a precedent could have major negative ripple effects. To be clear, there are stark differences between USAP’s alleged monopolistic behavior and the types of activities in which biotech companies typically engage. Nonetheless, life sciences innovation is fraught with risk, and the FTC already has signaled “a greater willingness to litigate” pharmaceutical developers. History shows us how a small change in one area can have unforeseen impacts on many others, especially when actions and perspectives are open for interpretation. If all providers of private capital were to be held liable for the decisions their portfolio companies make and the risks they take – which in most cases is well out of their hands – as the FTC intended for WCAS, the funding critical to these innovations would likely suffer as well. For an industry that has experienced drastic ups and downs over the last 5+ years, the results here could have had devastating implications on the advancement of innovation. While we await the southern district of Texas’ final ruling on USAP, we believe that WCAS’s dismissal represents a positive for private sector investors for the continued provision capital to life sciences innovators. #privateequity #USAnesthesiaPartners #WCAS #USAP #FTC #lifesciencesinvestment #lifesciencenews https://lnkd.in/eum2zfQD

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The latest on private equity-backed healthcare services: WSJ's initial article in a three-part series delves into the Steward Healthcare bankruptcy and the United States v. U.S. Anesthesia Partners antitrust case in Texas. Stay informed on the evolving landscape. #foleyandlardner #privateequity #healthcaretransformation #antitrust #bankruptcy #hospitals #healthsystems #healthcareprivateequity.

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Here is a piece written by Heather Barger regarding the new Texas Business Court system set to launch on Sept. 1.

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Washington state has agreed to pay U.S. law firm Munger, Tolles & Olson LLP up to $2.5 million for legal work on its lawsuit seeking to block Kroger’s $25 billion purchase of rival grocer Albertsons, contract records show. The documents, obtained by Reuters through a records request, show two partners at the firm are charging the state more than $1,100 an hour. Washington state sued Kroger in January, claiming its merger with Albertsons would drive up prices. The U.S. Federal Trade Commission and the state of Colorado are also challenging the proposed transaction in other lawsuits. Kroger and Albertsons have defended the deal and are fighting the cases. Read more: https://reut.rs/3VrKkZi 

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Check out this insightful analysis by my Ballard Spahr LLP colleagues of the implications of the recent Texas district court decision blocking the FTC ban on noncompete agreements.

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Our Co-founder and Partner Scott Yaccarino shares with The American Lawyer his take on "super" tier law firm partner compensation, suggesting that such compensation systems are trending in both elite and mid-market law firms. "It is absolutely a part of the bigger story of a rapidly evolving market, with respect to partner retention, partner recruiting, and a necessary adjustment to compensation models to accomplish both of those things." #legalindustry #lawfirms #lawfirmleadership #lawfirmlife #biglaw #legalrecruitment #legalcareers #lawcareers

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The Texas Lateral Market Report is out now. There were twenty partner and counsel moves in September. For more insights into the Texas lateral market, reach out to Saadia Sultan. https://bit.ly/4fgfGcG #themccormickgroup #legal #lateralhiring

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Houston partner Craig Kornreich details the trends in energy debt finance, ranging from the growing list of sources of capital to the enhanced ability to pivot between products such as cash flow, asset-based lending, private credit, and bridge debt in this episode of Latham in Focus.

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Recently Enacted Ban of Non- Complete Agreements has be Put on Hold By Attorney Ben Larkin, Managing Partner of Optimal Practice Transitions In April of 2024, the Federal Trade Commission announced what it called its “Final Non-Compete Clause Rule” or “Final Rule,” which banned most post-employment non-compete clauses between employers and their employees. The rule was to become effective on September 4, 2024. Did the rule apply to dentists? The rule included language excluding certain “senior executives,” which were defined for purposes of the rule as employees making in excess of $151,164 per year, so maybe the rule only applied to certain dentists? We do not know and may not know for a while. Earlier this summer, on August 20, 2024, a federal judge struck down the proposed Final Non-Compete Clause Rule in a decision going against the Federal Trade Commission. This followed a temporary injunction that had been granted in July 2024. The judge ruled, among other things, that the Federal Trade Commission lacked the statutory authority to issue the rule. In addition, the Court stated that the rule was “arbitrary and capricious” because its complete ban on non-competition agreements was, in the Court’s opinion, “unreasonably overbroad” and lacked a “reasonable explanation.” So, we are back to waiting to see if there will be a federal rule affecting non-competition agreements in general and in the dental world specifically. Please note that State law may still impose certain restrictions on non-competition agreements, so certainly check with an attorney familiar with the law in your State. Please also note that the proposed federal rule, and most State laws, specifically address employer-employee relationships and do not address non-competition clauses that are often included in practice purchase and sale transactions. Thus, as a dentist selling or buying a practice, you should still expect to see a non-compete clause in the practice purchase agreement. Learn more by reading Attorney Justin Marti’s article: Noncompetes Will Not Be Banned (For Now) (martilawgroup.com) https://lnkd.in/gdesZ7hr Optimal Practice Transitions

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UPDATE on the FTC Non-Compete litigation out of the Northern District of Texas. - The parties are required to submit their respective summary judgment motions on whether the FTC has substantive rulemaking authority to promulgate rules regarding unfair methods of competition within the next 30 days. - The Court will enter its ruling on or before August 30, 2024, just 5 days before the rule is slated to go into effect. Plaintiffs ultimately seek an order vacating the Non-Compete Rule. Expect to see some clarity on this later this summer. #FTC #noncompete #employmentlaw

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“In M&A transactions, WARN Act obligations can become complex, especially when layoffs occur before, during or after the closing of the deal.” Read more from Brian Patterson in The Texas Lawbook: https://lnkd.in/gkEigEGe #energysector #mergers #employmentlaw

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Michelle Fivel recently spoke with Andrew Maloney of The American Lawyer about compensation packages for lateral partners, highlighting how big law's buying power is reshaping the industry. The lateral market is becoming increasingly competitive, and firms are willing to go the extra mile to secure top talent. Explore the full article below. #LegalRecruiting #BigLaw #LateralPartners https://lnkd.in/gZnvf9Bc

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Here is an important development in labor and employment.

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The time has come for employers who rely on non-competition agreements to breathe a collective sigh of relief. Yesterday, a federal court in Texas set aside the FTC non-compete rule on a nationwide basis, declaring, “the Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024 or thereafter.”  For our latest update, click on the below link: https://lnkd.in/gp5u3JX9 #FTC #Noncompeterule #FTCnoncompeterule #restrictivecovenants #noncompetes

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