United States
Federal Trade Commission (FTC) Non-Compete Ban Blocked Nationwide
On August 20, 2024, a federal district court in Texas blocked the final rule issued by the FTC that would have prohibited all for-profit employers nationwide from using non-compete agreements with most workers. The final rule was set to take effect on September 4, 2024, and would have required employers to send notices to all current and former workers who had entered into covered non-compete agreements informing them that their covenants not to compete would not be enforced. The court’s decision set aside the final rule and ordered that it not be enforced or otherwise take effect on a nationwide basis. As a result of the Texas district court’s ruling, employers are relieved of the obligation to notify workers that their covenants not to compete are unenforceable. Employers also may continue to enter into and enforce noncompetition agreements with workers as permitted by applicable state law.
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U.S. Court of Appeals for the District of Columbia (D.C. Circuit) Vacates Environmental Protection Agency's (EPA) Denial of Biofuel Exemptions
In an appeal by small petroleum refiners challenging the EPA’s denial of their exemptions to federal renewable fuel blending requirements, the D.C. Circuit sided largely with the appellants, vacating the EPA’s denial. The decision vacated the EPA's denial of more than 100 petroleum refiners' hardship exemptions from renewable fuel standard requirements. The challenged actions were rendered after the U.S. Court of Appeals for the Tenth Circuit determined that the EPA's basis for granting several renewable fuel exemptions from 2016 to 2018 was flawed and remanded the decision back to the EPA. The refineries argued that unlike big oil companies, they do not have the capacity to blend the amount of ethanol and biofuels needed to keep up with renewable fuel standard requirements. As such, they were required to purchase Renewable Identification Numbers from companies that blend more fuel than necessary. The D.C. Circuit granted all but two companies' petitions for review challenging the EPA's rejection of their hardship exemptions, vacated the actions, and remanded them to the EPA for further proceedings.
Judge Strikes Down Missouri’s ESG Investing Barriers
On August 14, 2024, Judge Stephen Bough of the U.S. District Court for the Western District of Missouri issued an opinion overruling the state’s 2023 rules (the Rules) which limited the extent to which financial experts could consider ESG factors while advising on client investments. Judge Bough agreed with the plaintiffs’ assertion that the Rules created demands on certain financial institutions and securities dealers not seen in federal law and found that the Rules are expressly preempted by the National Securities Markets Improvement Act of 1996. Further, he highlighted the Rules’ vagueness as a barrier to their practical enforcement under the U.S. Constitution.
Electric Vehicle Group Seeks to Defend Fuel Economy Rule in the U.S. Court of Appeals for the Sixth Circuit (Sixth Circuit)
The Zero Emission Transportation Association (ZETA) filed a motion in the Sixth Circuit to help defend the National Highway Traffic Safety Administration's final rule on corporate average fuel economy (CAFE) standards (Final Rule). The CAFE standards cover vehicle model years of 2027 to 2032 and push manufacturers to include more fuel-efficient vehicles in their fleets such that by 2031, the overall fleet-wide average fuel economy is at least 50.4 miles per gallon.
Eight separate legal challenges have been brought against the Final Rule, which have been consolidated in the Sixth Circuit. The challenges are being brought by states, fuel and agricultural groups, and environmental advocates and present a range of positions. ZETA, a coalition of companies across the electric vehicle supply chain, is seeking to intervene in the suit, stating that "the stringency of the standards adopted by NHTSA in the final rule will have a significant effect on the demand for electric vehicles, the value of credits generated by manufacturers of zero-emission vehicles, and the scale of investment in electric vehicles and supporting infrastructure—all of which directly impact ZETA's members."
The consolidated challenge is MCP No. 189 Corp. Avg. Fuel Econ (NHTSA-2023-022), case number 24-7001 in the U.S. Court of Appeals for the Sixth Circuit.
United Kingdom
United Kingdom (UK) Advertising Watchdog Finds Virgin Atlantic Airways’ Sustainability Claim to Be Misleading
On August 8, 2024, the UK’s Advertising Standards Authority (ASA) found a radio advertisement by Virgin Atlantic Airways claiming to have conducted a transatlantic flight on “100 [percent] sustainable aviation fuel” to be misleading. The aviation fuel for the transatlantic flight was entirely composed of synthetic fuels derived from animal fats and plant refuse and had significantly lower greenhouse gas emissions over its lifecycle than conventional aviation fuels. However, complainants to the ASA highlighted that listeners of the advertisement could be misled into believing that burning the fuel created no environmental impacts at all.
The ASA reviewed a consumer opinion survey that Virgin Atlantic Airways had commissioned on how the advertisement was understood and highlighted that a significant portion of listeners either believed that the aviation fuel, as described, had no environmental impacts at all, or even worse environmental impacts than conventional aviation fuel. The ASA considered the likelihood that listeners would be misled absent information on the calculated emissions lifecycle reduction of 64 percent and details on how even “100 [percent] sustainable aviation fuel” could create materially adverse environmental impacts. The ASA told Virgin Atlantic Airways to include qualifying information on the environmental impacts in future versions of the advertisement.
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