Federal Judge Blocks FTC Noncompete Rule

A federal judge in Texas has blocked the FTC's upcoming ban on noncompete agreements, set to take effect on September 4, 2024, ruling that the agency overstepped its legal authority. U.S. District Judge Ada Brown deemed the FTC's prohibition 'arbitrary and capricious,' criticizing the lack of sufficient justification for such a broad ban. The ruling stems from a lawsuit filed by tax services firm Ryan and supported by the U.S. Chamber of Commerce, which argued the ban would hinder companies' ability to retain talent. FTC spokesperson Victoria Graham expressed disappointment and indicated the agency is considering an appeal, emphasizing the need to combat practices that restrict workers' job mobility. The White House continues to support the ban, labeling it critical for expanding job opportunities for millions of Americans. Meanwhile, the FTC will resort to case-by-case enforcement actions while the legal battle unfolds.