Federal Trade Commission (FTC) efforts to prohibit non-compete agreements It was blocked by a federal judge in Texas. according to The Washington PostThere’s U.S. District Judge Ada Brown is defined said the agency did not have the authority to enforce the rule, which was supposed to take effect on Sept. 4. He wrote in his decision that the FTC only considers “inconsistent and flawed empirical evidence” and does not review the evidence. support of non-competes. “The role of an administrative agency is to do what Congress says, not what the agency thinks it should do,” he said.
When the agency voted 3-2 in favor of the ban, FTC Chairwoman Lina M. Khan explained that “non-compete clauses keep wages down, stifle new ideas and rob the American economy of dynamism.” Non-compete agreements are widely used in the technology industry, and preventing companies from adding them to contracts means employees can freely move to a new job or start a business in the same field. The two Republican commissioners on the FTC, Melissa Holyoak and Andrew Ferguson, voted against the ban and also said the agency “overstepped the bounds of its power.”
In July, Brown temporarily blocked Applying the rule to evaluate a lawsuit filed by Dallas tax services firm Ryan LLC hours after the FTC announced the ban. The U.S. Chamber of Commerce and other American business groups eventually joined the tax firm in challenging the new rule on non-compete clauses.
“We are disappointed by Judge Brown’s decision and will continue to fight to prevent antitrust that limits the economic freedom of hard-working Americans, hinders economic growth, stifles innovation and lowers wages,” said FTC spokeswoman Victoria Graham. The Post. “We are seriously considering a potential appeal, and today’s decision does not preclude the FTC from pursuing non-compete enforcement actions on a case-by-case basis.”
A federal judge in Florida also blocked the rule last week, though only for plaintiffs. Meanwhile, another judge in Pennsylvania ruled last month that the agency had the authority to enforce the ban in a separate case brought by a state tree care company. All three cases are still open to appeal and could even go to the Supreme Court.
