From the Daily Caller: A federal judge struck down a Biden administration rule on Tuesday that banned employers from using noncompete agreements, which would have affected the contracts of millions of Americans.
U.S. District Court Judge Ada Brown for the Northern District of Texas ruled that the Federal Trade Commission’s (FTC) banning the entire category of noncompetes, rather than targeting “specific, harmful” sub-categories of the agreements, went beyond the commission’s mandate to police unfair methods of competition. The ban on the contracts that limit workers’ ability to move to rival firms, which was announced in April, was supposed to go into effect on September 4 and would have affected roughly 30 million American workers, according to the initial FTC press release.
“The Commission’s lack of evidence as to why they chose to impose such a sweeping prohibition — that prohibits entering or enforcing virtually all non-competes — instead of targeting specific, harmful non-competes, renders the Rule arbitrary and capricious,” Brown wrote in her ruling.
The case was brought by tax services and software provider Ryan LLC, with backing from the Chamber of Commerce and other business advocacy groups, court documents show.
The FTC is fuming over the judge’s ruling, and a spokesperson told the Daily Caller, “We are disappointed by Judge Brown’s decision and will keep fighting to stop noncompetes that restrict the economic liberty of hardworking Americans, hamper economic growth, limit innovation, and depress wages. We are seriously considering a potential appeal, and today’s decision does not prevent the FTC from addressing noncompetes through case-by-case enforcement actions.”
FTC Chair Lina Khan announced on April 23, 2024, “Today @FTC issued a final rule banning noncompetes for workers across the country. The rule will ensure that Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”
She still has the announcement pinned to the top of her X page, as of this report, despite that a judge has slapped down her NDA ban.
1. Today @FTC issued a final rule banning noncompetes for workers across the country.
The rule will ensure that Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.https://t.co/Ax9QQtHuvn
— Lina Khan (@linakhanFTC) April 23, 2024
A federal judge in Texas has blocked the FTC’s ban on noncompete contracts for American workers, which was set to go into effect next month. @rebeccajarvis has more. pic.twitter.com/XNHWIfiCum
— Good Morning America (@GMA) August 21, 2024
A Texas federal judge on Tuesday permanently blocked the FTC’s looming ban on noncompete agreements in employment contracts, setting aside the regulation with a conclusion that it’s beyond the agency’s authority. https://t.co/6F2kVjBQyk
— Law360 (@Law360) August 21, 2024
After being touted as a major Biden win, this falls apart like most Biden/Demoncrat policies. If only there was a Demoncrat who actually have read the USoA Constitution! https://t.co/AjbxiWgySw
— Ray Pendergast (@RayPendergast01) August 21, 2024
Breaking: The Federal Trade Commission’s ban on noncompete agreements was blocked by a federal judge https://t.co/FxNf4qudoA https://t.co/FxNf4qudoA
— The Wall Street Journal (@WSJ) August 20, 2024
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