We’re one week away from Promotional Products Work Day, an annual event organized by PPAI to raise awareness about the power of promotional products and the impact they can have on brand recognition, customer loyalty and overall business success.

On August 20, the Association – together with its members and other industry professionals – will actively recognize and promote the value and effectiveness of promo products – the most memorable form of advertising.

• Nearly three quarters (73%) of end buyers purchase promo products on either a monthly or quarterly basis, and 83% are satisfied with the quality of the branded merchandise they receive from their primary source, according to PPAI Research’s Understanding End Buyers 2024 study.

Through various activities, events and educational resources, Promotional Products Work Day aims to inspire and inform businesses and consumers why promo products are universally valued and essential to every brand.

• Facebook

• Instagram

• LinkedIn

#SpotThePromo

In honor of Promotional Products Work Day, PPAI is launching #SpotThePromo, a social media campaign designed to showcase the ubiquitousness of promo products.

Industry members are encouraged to post photos of the merch that they encounter throughout the day, along with the hashtags #promotionalproductswork and #SpotThePromo, while tagging PPAI’s social media accounts.

RELATED: The 2024 #Online18 (Part 2): The Best Promo Pros On Social Media

The Association’s leaders will also #SpotThePromo while visiting with members throughout the week. Of course, Promotional Products Work Day is an international holiday, and the Promotional Products Professionals of Canada (PPPC) will also be participating.

“The goal of #SpotThePromo on Promotional Products Work Day is to show off the way promo works its way into our homes, offices, cars, pockets, and more, becoming part of our lives in a way that other advertising simply can’t,” says Lindsey Davis, MAS, director of sales and professional development at PPAI.

Don’t miss anything on Aug. 20 and beyond. Follow PPAI on social media:

Here are nine ways that you can celebrate Promotional Products Work Day.

Written by: John Corrigan

Published with Permission from PPAI

After nearly a century in business, Quick Point (PPAI 114051, Silver) is shutting down.

John Goessling, president of the Missouri-based supplier of drinkware, letter openers and home accessories, has decided to retire from the promotional products industry and he will be closing his company at the end of the month.

“My three successful children have already discovered their talents in other professions and decided the promotional products industry just wasn’t for them,” Goessling tells PPAI Media. “With these things in mind, I decided this was a good time to retire and write my next chapter.”

The firm will still be accepting orders from distributors through the end of August and plans on wrapping up production by the end of September or early October.

Family Business

Goessling’s grandfather founded the company (formerly known as Quick Point Pencil Company) in 1928.

• Goessling’s father, John Sr., took over the firm after serving as an officer in the U.S. Navy.
• Goessling drew his first paycheck from Quick Point in 1969 and has been with the company full-time since 1990.
• The company is most known for their line of Zippy letter openers they introduced in the 1960’s

“It saddens me to say goodbye,” Goessling says. “I want to thank everyone who contributed to keeping Quick Point in business for the last 96 years. The industry has been good to me and my family, but I’m ready to see what’s ahead.”

Written by: John Corrigan

Published with Permission from PPAI

Turmoil in Bangladesh has disrupted the apparel industry.

Protests over a quota system that reserves up to 30% of government jobs for relatives of veterans who fought in Bangladesh’s war of independence against Pakistan in 1971 turned violent in mid-July, and has since resulted in more than 400 deaths, The Independent reported.

• The mass uprising forced Prime Minister Sheikh Hasina to resign and flee the country.

Curfews and an internet blackout have been implemented to quell the unrest, but they’ve also led to many international garment buyers either cancelling their orders or demanding compensation for the hassle, The Bangladesh Business Post reported.

• Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), estimated that orders worth approximately $4 billion were lost to competitors during the internet blackout.

Garment factories, accounting for 90% of Bangladesh’s exports, reopened on Wednesday, Reuters reported.

• Bangladesh was the third-largest exporter of clothing in the world last year, after China and the European Union, according to data from the World Trade Organization.

Impact On Promo

Bangladesh emerged as one of the fastest-growing alternatives to China, especially for apparel, after the tariffs rolled out in 2018, according to Rachel Zoch, public affairs and research editor at PPAI.

• H&M, Levi Strauss, Target and Fruit of the Loom are among major retailers who source garments from Bangladesh factories or have their own operations in the country, Reuters reported.

“Sourcing from Bangladesh hasn’t been without challenges, however, and this latest turmoil comes less than a year after violent protests and a massive weeklong strike by garment workers for higher wages,” Zoch says. “It’s critical that importers look at regional stability, as well as prioritizing safety and ethics, when considering sourcing from emerging markets.”

The unrest may lead to delays in promotional products firms receiving apparel in time for the holiday season, says Larry Whitney, managing partner of Whitney & Whitney Consulting Group and former director of global compliance at PCNA – the No. 3 supplier in the PPAI 100.

• PCNA told PPAI Media last year that it had shifted 90% of its cotton product procurement from China to India and Bangladesh.

“I suspect that the unrest comes at a bad time for those suppliers who are using Bangladeshi factories and have new styles that are supposed to ship to North America in the next few weeks,” Whitney says. “The longer the unrest lasts, the longer it will take factories to manufacture orders. There are often challenges with getting goods on vessels in Bangladesh, too.”

Gildan Activewear – the No. 10 supplier in the PPAI 100 – announced earlier this year that it would shift the manufacturing of its basic apparel pieces from Honduras to Bangladesh. 

Despite the unrest in recent weeks, Gildan’s expansion plans will carry on as scheduled, according to Geneviève Gosselin, director of global communications and corporate marketing at Gildan.

“As the situation unfolds in Bangladesh, our priority is to continue to ensure that our employees are safe,” Gosselin told PPAI Media. “Our operations have been temporarily closed to ensure our employees’ safety and respect the three-day government-imposed curfew and declared general holiday. We expect the situation will stabilize over the upcoming days, which would allow us to resume our operations.”

Gosselin says the expansion involves the development of a large multi-plant manufacturing complex expected to house two large textile facilities and related sewing operations. The construction of the first textile and sewing complex is “substantially completed,” Gosselin says, while a “progressive ramp-up” of operations is underway and will continue through 2024.

Written by: John Corrigan

Published with Permission from PPAI

After more than three decades in the promotional products industry, Jeffrey Nanus has retired.

Nanus was the president of Orangeburg, New York-based supplier AAA Innovations (PPAI 110972, Standard-Plus), which was acquired in April by Sign-Zone, the parent company of Showdown Displays (PPAI 254687, Platinum) – the No. 8 supplier in the PPAI 100.

After spending the Fourth of July weekend with his family, Nanus says he made the decision to step away from promo. “There should be a new voice to lead the company forward,” he told PPAI Media on Thursday after finishing a round of golf. “My family is excited, maybe even more so than I am.”

Nanus purchased AAA Innovations (formerly AAA Umbrella) in 1992, growing the firm from $1 million in revenue to roughly $40 million. “I grew the company the same way that many suppliers and distributors do – by being fortunate enough to hire a bunch of great people to work with,” he says.

Nanus takes great pride in AAA Innovations being ahead of the curve in terms of sustainability.

• He says the company redesigned every one of its products (that it could) to include certified recycled materials without raising prices.

“I learned from clients that everybody loves the idea of doing good for the environment until they hear the cost,” Nanus says. “Well, we sold our eco-friendly products at the same price as non-eco-friendly products. It wasn’t a marketing gimmick for us. It was the legacy that I wanted to leave.”

American Dream

When Sign-Zone acquired AAA Innovations, Nanus was expected to remain with the organization as president. Nonetheless, Sign-Zone CEO John Bruellman supports Nanus’ decision and wishes him all the best.

“I respect the guy like crazy,” Bruellman says. “He’s the classic example of the American dream. He took a company from almost nothing, going through all the typical struggles that an entrepreneur does and grew it into a substantial enterprise. It’s time for him to enjoy the fruits of that.

“Frankly, I’m not sure how well he’ll do in retirement because he’s a very hard worker. We’ll see how well he can relax.”

Bruellman anticipates a seamless transition for customers, as the firms’ factories were integrated following the acquisition. However, AAA Innovations will continue to retain its own brand identity and sales team. Bruellman will oversee Nanus’ direct reports until a successor is named.

“We have some big shoes to fill,” Bruellman says. “I told him, ‘We’ll take care of your baby and hopefully improve upon all the good things you did here’ while continuing to take the business in the right direction.”

Written by: John Corrigan

Published with Permission from PPAI

S&S Activewear (PPAI 256121, Platinum) – the No. 5 supplier in the PPAI 100 – has announced the acquisition of alphabroder (PPAI 156993, Platinum) – the No. 2 supplier in the PPAI 100.

• Based on alphabroder’s 2023 revenue, this acquisition could put S&S Activewear’s revenue this year at more than $4 billion, potentially unseating SanMar as the No. 1 supplier in the promotional products industry.

S&S Activewear and alphabroder have satisfied the regulatory review needed to complete the transaction. Upon completion of the transaction, which is expected to occur later this year, both companies will continue to go to market under their respective brands and existing distribution channels.

S&S Activewear CEO Frank Myers and alphabroder CEO Dan Pantano will lead a disciplined, multi-year integration process designed to maintain the sales momentum for each business and position the combined company for long-term growth.

“We’re pleased to reach an agreement that unites two great companies and positions the S&S Activewear and alphabroder family of employees, customers and vendors for long-term growth,” Myers says.

“With the addition of alphabroder’s dedicated and experienced employee base, strong portfolio of brands and distribution capabilities, we’ll not only expand our product offering, but will also accelerate our investment in the customer experience, including our marketing, technology and supply-chain capabilities. Building on S&S Activewear’s 35-year track record of growth, we look forward to welcoming alphabroder to the organization while continuing to strengthen our win-win relationships with our industry partners.”

Industry Reaction

The merger, which joins two of only three companies in the industry with annual sales in excess of $2 billion, is arguably the most substantial example of the industry’s increasing consolidation.

“Since no single company or group of companies dominates market share, it should come as no surprise that our industry is ripe for continued consolidation,” says Dawn Olds, MAS, Interim CEO and President of PPAI.

RELATED: M&A Best Practices: How To Ensure A Successful Transition

“Having been part of many acquisitions myself, I know that both sides go into a deal expecting to see 1+1 equal more than 2. It will be exciting to see these two great organizations achieve their joint vision and come together to do things they might not have done alone.”

In response to the merger, which puts the combined company on pace to potentially rival SanMar in the apparel market, SanMar CEO Jeremy Lott told PPAI Media: “We have great competitors today as we have had for over 50 years. We will continue to be focused on our customers and how we can best service them. That’s what has made us successful in the past and will continue to be our focus in the future.”

Ultimately, the merger is an exciting development, according to Lori Bauer, CEO of iPROMOTEu – the No. 11 distributor in the PPAI 100 – and a member of the PPAI Board of Directors.

“Both companies are well regarded as iPROMOTEu preferred vendors,” Bauer says, “and this merger promises to enhance the customer experience significantly. With their plans to expand product offerings, invest in technology and upgrade resources and capabilities, we believe this acquisition will drive industry growth and provide enhanced services for promo distributors.”

What To Expect

As part of the transaction, S&S Activewear intends to make significant investments in technology, the integration and expansion of its sales force, its supply chain and distribution capabilities, and the employee experience.

“We’re thrilled to have found a partner in S&S Activewear that shares our customer-centric approach and commitment to investing in the brands, infrastructure and teams needed to build and strengthen successful long-term relationships,” Pantano says. “alphabroder has created one of the industry’s leading brand portfolios, and together with S&S Activewear, will benefit from an even stronger and deeper supply-chain network backed by integrated marketing and order fulfillment capabilities.”

S&S Activewear’s acquisition of alphabroder will build on its significant investments in its North American network and footprint. Since 2015, S&S Activewear has established twelve distribution centers, creating a nationwide coverage network to serve 99% of the United States, Canada and Puerto Rico within two days.

• As a combined business, S&S Activewear will focus on advancing its sustainability efforts, which has included the adoption of solar energy technology, high-efficiency LED lighting, water efficiency, and recycled packaging across the organization.

Written by: John Corrigan

Published with Permission from PPAI

Gemline has announced an expanded partnership with High Sierra, a retail provider of primarily backpacks and duffels that is part of the Samsonite umbrella.

• The collaboration will make PPAI 100’s No. 11 supplier the exclusive provider of High Sierra’s Fall and holiday lineup.
• The announcement builds on a successful partnership that began nearly a decade ago when Samsonite chose Gemline (PPAI 113948 Professional Platinum) to make headway in the branded merchandise marketplace. 
  

“We are steadfast in our commitment to continuously expand our product offering, and this partnership allows us to deliver unprecedented value to our customers,” says Gemline President and CEO Frank Carpenito of the recent collaboration.

The extended partnership between Gemline and Samsonite is an example of promo and retail brands finding success by leveraging known and trusted products and incorporating them into the promo marketplace. High Sierra’s focus on products meant for travel – either business or adventure – creates a promotional opportunity for a brand name to be seen in myriad global settings.

“High Sierra’s retail products offer the perfect canvas for brand visibility, ensuring that businesses stand out in a competitive market, and it’s the first time these retail products have been offered in the promotional channel,” says Carpenito.

• Earlier this year, Gemline reincorporated as a Public Benefit Corporation, meaning the government has recognized the supplier as being in the public interest and requiring Gemline to certain fiduciary responsibilities.
• This was followed up by debuting an extensive carbon footprint data program that provides public information about individual products offered through Gemline.

Written by: Jonny Auping

Published with Permission from PPAI

Terry Town’s systems are back online after suffering a cyberattack causing a multi-day outage. The incident left the supplier unable to perform key functions required to process or ship orders from Monday through Wednesday.

• Terry Town (PPAI 230911, Professional Gold) is PPAI 100’s No. 40 ranked supplier.
• While staff emails were not down, the staff temporarily lost access as passwords were changed as security measures.
  

“We have spent the past two weeks working to restore full operations,” says Sy Ereren president of Terry Town. “Currently, we are safely back and fully operational, with all communication lines open.”

• The computer network disruption took place on Monday, July 15 with the hack possibly occurring the weekend prior.  
• As of July 18, Terry Town was safely able to communicate via phone and email, but the supplier was still not what it considered to be fully operational.
  

The supplier says that there is no evidence data breach occurred as a result of the hack.

What Happened?

On July 15 Terry Town experienced a cyber-attack that impacted its main server, disrupting order processing, inventory management and phone and email communications.

In response to the incident, the company has:

• Conducted comprehensive system scans
• Implemented enhanced security measures to protect against future threats.
  

An investigation into the incident is ongoing. With no current evidence of a data breach, partners of Terry Town should not be concerned with the status of any private information.

“Our primary challenge now is addressing the backlog of communications and processing requests,” says Ereren.

A Growing Trend Of Cyber Scams

The entire promo industry needs to be aware of the constant threat of cyber scammers, ransomware possibilities and general hackers. Safe practices and employee education are more than a wise precaution against an unlikely threat. Any given member of PPAI should expect to be targeted in multiple attempts of these types of crimes.

In fact, PPAI itself was targeted recently in a defrauding scam, as recently detailed by PPAI Media.

Unfortunately, this is a reality that promo firms will need to accept. In the near future, the number of scammers will only increase, and their tactics will become more sophisticated.

• Many large enterprise clients are demanding that distributors increase their data protection efforts despite the often-high cost to do so.
• In June, PPAI Media reported on a Florida distributorship’s bank account being hacked, leaving the owners high and dry when their bank would not assist.

Written by: Jonny Auping

Published with Permission from PPAI

Maple Ridge Farms (PPAI 114165, Gold) has announced the acquisition of St. Louis-based Sweeter Cards (PPAI 810735, Standard-Base).

• It’s the first acquisition in the Mosinee, Wisconsin-based gourmet food company’s 45-year history.
• Maple Ridge Farms is the No. 60 supplier in the PPAI 100.

As a result of the deal, Sweeter Cards will continue to operate from St. Louis and carry the same chocolate, but there will be overlap in the firms’ product offerings and sales teams.

“Sweeter Cards is an incredibly good fit for us,” says Tom Riordan, founder and president of Maple Ridge Farms. “The enthusiasm and synergy between these two companies is incredible.”

Your Reputation Precedes You

Riordan is quick to credit Jodie Schillinger, MAS, executive vice president at Maple Ridge Farms, for spearheading the deal.

Although M&A was never a focus for the company, Schillinger says she’s always on the lookout for the next big thing. While a local candy maker or ice cream provider may have caught her eye over the years, nobody has had a more compelling story than Stacy Stahl, who launched Sweeter Cards in 2019.

• The company’s flagship product is an all-in-one, fully customizable greeting card and chocolate bar.
• As a woman-owned enterprise, Sweeter Cards prioritizes fair trade-certified chocolate, recyclable card packaging and the employment of adults with disabilities.

“When I read her story, I thought it was brilliant,” Schillinger says. “She’s a fascinating entrepreneur, thoughtful, but fast moving, and knows how to incorporate fun in her design work, which our marketing team and I absolutely admire and love.”

Schillinger met Stahl at The PPAI Expo 2024, where the latter was the runaway champion of The Pitch, winning over a panel of veteran distributor judges. Of course, Stahl was well-aware of Maple Ridge Farms’ dominant presence in the promotional products industry, praising it as the “shining example of how a food company can be great in this space.”

• Maple Ridge Farms scored No. 1 in the Employee Happiness category in the 2024 PPAI 100. This comes as no surprise, as the firm has appeared three times on PPAI’s Greatest Companies To Work For list. 

But she was blown away by Schillinger’s warmth and open arms, especially considering they were competitors at the time. Schillinger followed up a month or so later to see if they could collaborate on any projects and learn from each other. After finding complementary strengths in their personalities, dedication to their customers and the ethos of their businesses, Stahl says an acquisition seemed inevitable.

“From the moment it was on the table, it felt like it was the perfect match,” Stahl says.

Missing Ingredients

Ultimately, the acquisition came together because both parties have something the other desires.

In addition to Sweeter Cards’ values aligning with those of Maple Ridge Farms, the former offers a solution to a problem that the latter has never been able to crack.

“We’ve struggled to find a good quality gift for the under $20 price point,” Schillinger says. “Although we have gifts in that category, Sweeter Cards is really going to help amplify that. We want to create this brand legacy with an impactful message. To find a partner that represents those same values and leads with integrity, fun and delicious food doesn’t happen a whole lot, especially under that $20 price point.”

As for Stahl, she feels as if she’s taken her company as far as she can on her own. Joining an established player in the food market can instantly broaden Sweeter Cards’ reach. After all, Maple Ridge Farms has relationships with nearly seven times as many distributors as Stahl’s firm does.

“It’s hard to grow without additional resources,” Stahl says. “I love bringing ideas into reality, creating efficient supply chains and processes around them, essentially creating a well-oiled machine. Once that machine is ready to go, it leaves me just in a sales position. There’s a lot of potential, but with just little ol’ me, I can take it only so far. I was primed for a larger organization with deep sales relationships, and I don’t know anyone with deeper relationships than the Maple Ridge team.”

• In February, Sweeter Cards joined Rupt Ventures.

Anticipating exponential growth due to the acquisition, Stahl says her role will be to continue managing brand awareness, as well as working with the Maple Ridge product team on innovation.

“There’s just so much brand alignment, which is hard to find,” Stahl says. “Every conversation I’ve ever had with someone who could be a potential acquirer, my thoughts are always half in my brain and half in my heart. If the integrity or the overlap in mission and values isn’t there, then the conversation doesn’t go much further than a handshake and a ‘take care.’”

Hit The Ground Running

The deal couldn’t have come at a better time, as both companies are gearing up for the holiday season – their busiest period of the year.

• Riordan says Labor Day weekend kicks off the marketing push for holiday orders.
• Maple Ridge Farms has 27 full-time employees and ramps up to 300 seasonally, Schillinger adds.

The companies plan to introduce new gourmet treats within Sweeter Cards’ offering (cookies were added before the acquisition), featuring Maple Ridge Farms’ diverse array of food items. For example, jelly beans and gummy bears could soon find their way into Sweeter Cards’ greeting cards, Riordan says.

He also hasn’t shut the door to further acquisitions, but it depends on the opportunity. Considering he and Stahl just happen to be kindred spirits, this deal was too sweet to pass up.

“We think alike,” Riordan says. “She has really good instincts, which is important for anybody in business. She’s very personable and likeable, and of course, people like to do business with people they like. She’s also very quality oriented, which works very well with us because we don’t want to have the cheapest gifts out there. We want to have the best.”

RELATED: Sweet Success: Sweeter Cards Unwraps A Promo Winner

Stahl says that she sees a lot of herself in Riordan, and vice versa, emphasizing the shared chemistry in how they view their businesses, clients and products.

“I’ve already learned a lot from his tried-and-true stories,” Stahl says. “Both of my parents were lifelong entrepreneurs, so I’ve seen what it means to put your heart into something for so long, and I really admire that in Tom.”

It’s a mutually beneficial relationship in many ways, says Schillinger, who’s eager to learn from Stahl’s lean efficiencies while imparting some of her wisdom from two decades in promo to the industry up-and-comer.

“Stacy’s story and Sweeter Cards is part of our branding ethos moving forward,” Schillinger says. “Together, we’re here to help grow the Sweeter Cards brand within Maple Ridge while being true to Stacy’s story just as true as we are to the Maple Ridge story. It’s an organic fit that will help hype a vibe on the foodie scene.”

Written by: John Corrigan

Published with Permission from PPAI

American Solutions for Business recently co-hosted an international dinner with industry partner, Advertising Specialty Institute (ASI). This event underscored our commitment to building a global network and brought together industry leaders and partners from around the world.

Guests joined the dinner as they arrived to attend the ASI Show in Chicago, IL. This served as an opportunity to welcome individuals from all over the world, including representatives from leading promotional product industry countries such as Canada, UK, Germany, and Turkey. As we continue expansion, we remain mindful of the industry and our customer base on a global scale.

“When Dana asked me if I’d be interested in co-hosting a dinner with him and the ABS team for all the international promo folks coming to the ASI Chicago Show, I happily accepted,” says Michele Bell, ASI’s Senior Vice President of Content & Global Alliances. “I know what it’s like to travel to overseas promo shows and not know many people, and I’ve always appreciated how warm and generous our global industry colleagues have been to me and members of ASI’s team when we attend their events. Dana’s idea to have this dinner and welcome our promo friends from around the world to show them the gracious hospitality they’ve shown us was a fabulous one.”

We value our partnership with ASI on this event and on shared initiatives to reach global markets. ASB is proud to build relationships with industry leaders from around the world.

A federal judge in Pennsylvania has denied a small business’ request to temporarily block the Federal Trade Commission’s new rule banning employers from imposing non-compete clauses on their employees.

• Earlier this month, a federal judge in Texas partially blocked the FTC’s rule, vowing to issue a final ruling by August 30, with the rule set to take effect on September 4.

‘Empowered…To Prevent Unfair Methods Of Competition’

Perkasie, Pennsylvania-based ATS Tree Services, which has 12 employees, argued that it would be “irreparably harmed” by the rule, which the company claims the FTC “lacks the authority to issue.”

On Tuesday, U.S. District Judge Kelley Hodge in Philadelphia disagreed, saying that the “FTC is empowered to make both procedural and substantive rules as is necessary to prevent unfair methods of competition” under Section 5 of the FTC Act.

• Furthermore, ATS Tree Services didn’t demonstrate how it will incur “nonrecoverable efforts to comply” with the rule and lose “the contractual benefits from its existing non-compete agreements,” according to Hodge.

“The Court finds Plaintiff has failed to establish a reasonable likelihood that it will succeed on the merits of its claims that the FTC lacks substantive rulemaking authority under its enabling statute, that the FTC exceeded its authority, and that Congress unconstitutionally delegated legislative power to the FTC,” Hodge wrote in her opinion.

Josh Robbins, an attorney for ATS at the Pacific Legal Foundation, said he and his clients were “disappointed” by the judge’s decision and vowed to “continue to fight the FTC’s power-grab.”

“The FTC does not have the statutory authority to rewrite millions of employment contracts by banning non-compete agreements. ATS, a small tree care business, relies on its non-compete agreements to enable it to provide valuable training to its employees. Banning these agreements will significantly harm ATS’s business,” Robbins told The Hill.

Meanwhile, FTC spokesperson Douglas Farrar tweeted: “The judge’s decision fully vindicates that precedent and the plain text of the FTC Act clearly provide us rulemaking authority to ban noncompete clauses, which harm competition by inhibiting workers’ freedom and mobility while stunting economic growth.”

Partially Blocked

Hodge’s decision conflicts with that of U.S. District Judge Ada Brown in Dallas, who said in a written decision on July 3 that the FTC “lacks the substantive rulemaking authority with respect to unfair methods of competition.”

As a result, Brown granted a motion for a preliminary injunction preventing the rule from taking effect in September while the court considers if the FTC actually has the power to issue the ban.

• The motion was requested by tax preparation company Ryan LLC and the U.S. Chamber of Commerce, which filed a lawsuit just one day after the FTC’s 3-2 vote.
• The order prevents the rule from being enforced specifically against Ryan and the Chamber – Brown denied their request to block the rule nationwide.

Appeals appear likely in both cases, regardless of the outcome, according to Law360. If the Third Circuit, which reviews decisions in Pennsylvania, and the Fifth Circuit, which reviews decisions in Texas, issue split decisions, the U.S. Supreme Court may get involved.

Meanwhile, a third case is underway in Florida federal court with retirement community Properties of the Villages challenging the FTC’s rule.

Breaking Down The FTC Ruling

Non-compete clauses are a contractual term between an employer and a worker that blocks the worker from working for a competing employer or starting a competing business, typically within a certain geographic area and period of time after the worker’s employment ends.

• About 30 million people (20% of U.S. workers) have signed non-competes, according to the FTC.
• The FTC’s ruling leaves existing non-competes with senior executives intact while banning future non-competes for top corporate officials.

In February, PPAI Media listed non-compete clauses as one of the key employment areas to watch in 2024 after the FTC proposed the legislation that this ban initially stemmed from in January.

Last year, Joshua White – then the head of strategy and general counsel at BAMKO and a member of the PPAI Board of Directors – wrote a column for PPAI Media arguing against non-compete contracts as a practice in promo and predicting the FTC’s decision.

“The point here is not to challenge your opinion on non-competes,” White wrote. “I expect the FTC will take that issue out of your hands soon enough. My point is to challenge the way you think about people, culture and the role you play in shaping both.”

• California, Minnesota, Oklahoma and North Dakota have already banned noncompete agreements, and at least a dozen other states have passed laws limiting their use, Reuters reported.
• The FTC’s rule would be the first nationwide prohibition of non-competes.

Written by: John Corrigan

Published with Permission from PPAI