Current:Home > reviewsFTC’s bid to ban noncompete agreements rejected by federal judge in Texas -Wealth Axis Pro
FTC’s bid to ban noncompete agreements rejected by federal judge in Texas
View
Date:2025-04-16 01:57:49
A federal judge in Texas has blocked a new rule from the Federal Trade Commission that would have made it easier for employees to quit a job and work for a competitor.
In a ruling Tuesday, U.S. District Judge Ada Brown granted a motion for summary judgement filed by the U.S. Chamber of Commerce and other plaintiffs, and rejected the FTC’s own petition for a judgement in its favor.
In reaching his decision, Brown concluded that that the FTC “exceeded its statutory authority” in making the rule, which the judge called “arbitrary and capricious.” The judge also concluded that the rule would cause irreparable harm.
As a result of the court’s decision, the FTC won’t be able to enforce its rule, which was set to go into effect on Sept. 4, according to the judge’s ruling.
Still, the decision does not prevent the agency from addressing noncompete agreements through “case-by-case” enforcement actions, said Victoria Graham, an FTC spokesperson.
The FTC is also considering appealing the court’s decision, Graham said.
The FTC voted in April to prohibit employers nationwide from entering into new noncompete agreements or enforcing existing noncompetes, saying the agreements restrict workers’ freedom and suppress wages.
But companies opposing the ban argue they need noncompete agreements to protect business relationships, trade secrets and investments they make to train or recruit employees.
Apart from the Texas case, companies sued the FTC in Florida and Pennsylvania to block the rule.
In the Florida lawsuit, which was brought by a retirement community, the court granted a preliminary injunction, prohibiting enforcement of the rule just for the plaintiff, but not any other company.
In the Pennsylvania lawsuit, the court concluded that the plaintiff, a tree company, failed to show it would be irreparably harmed by the ban and that the company wasn’t likely to win the case.
The divergent rulings mean the issue could end up working its way to the U.S. Supreme Court.
veryGood! (156)
Related
- 'Malcolm in the Middle’ to return with new episodes featuring Frankie Muniz
- Katy Perry Gives Luke Bryan and Lionel Richie a Mullet Makeover on American Idol
- Miles Teller Celebrates Spectacular Birthday in Paris With Wife Keleigh Sperry Teller
- Lady Gaga Sued by Woman Charged in Dog Theft Who Is Demanding $500,000 Reward
- Which apps offer encrypted messaging? How to switch and what to know after feds’ warning
- Swarm Trailer Shows One Fan's Descent into Madness Over Beyoncé-Like Pop Star
- 'Wait Wait' for May 27, 2023: Live from New Orleans with John Goodman!
- Miles Teller Celebrates Spectacular Birthday in Paris With Wife Keleigh Sperry Teller
- Bill Belichick's salary at North Carolina: School releases football coach's contract details
- And just like that, Kim Cattrall will appear in the 'Sex and the City' spin-off
Ranking
- A White House order claims to end 'censorship.' What does that mean?
- You Won't Believe the 2003 SAG Awards Red Carpet Fashion Looks That Had Everyone Talking
- He once had motor skill challenges. Now he's the world's fastest Rubik's cube solver
- How to Watch the 2023 SAG Awards
- Don't let hackers fool you with a 'scam
- Jamie Lee Curtis Has a Message to Those Who Think She's Just a Nepo Baby at 2023 SAG Awards
- Kenneth Anger, gay film pioneer and unreliable Hollywood chronicler, dies at 96
- Ariana DeBose Pokes Fun at Her Viral Rap at SAG Awards 2023
Recommendation
NHL in ASL returns, delivering American Sign Language analysis for Deaf community at Winter Classic
Three great songs for your next road trip
Treat Yourself to a Spa Day With a $100 Deal on $600 Worth of Products From Elemis, U Beauty, Nest & More
Want Johnny Carson's desk? A trove of TV memorabilia is up for auction
California DMV apologizes for license plate that some say mocks Oct. 7 attack on Israel
Several hospitalized after Lufthansa flight diverted to Dulles airport due to turbulence
'The Wind Knows My Name' is a reference and a refrain in the search for home
We ask 3 Broadway photographers: How do you turn a live show into a still image?