A federal judge Tuesday blocked a nationwide ban on noncompete agreements from taking effect in September.
The Federal Trade Commission (FTC) voted in April to ban most noncompete agreements, which prevent tens of millions of employees from leaving their jobs to work for competitors or start a competing business.
The Dallas-based tax firm Ryan LLC, the U.S. Chamber of Commerce, the Business Roundtable and other business groups sued to block the rule from going into effect, alleging agency overreach that would make it harder for companies to retain talent.
U.S. District Judge Ada Brown in Dallas said the FTC had overstepped its statutory authority and called the rule “arbitrary and capricious.”
Last month, a federal judge in Philadelphia rejected a bid by tree-trimming company ATS Tree Services to block the ban, reasoning the FTC has the authority “to prevent unfair methods of competition in commerce” under the 1914 Federal Trade Commission Act.
Posted by John3262005
3 Comments
Nationwide injunctions from shopped district judges delenda est
>The Dallas-based tax firm Ryan LLC, the U.S. Chamber of Commerce, the Business Roundtable and other business groups sued to block the rule from going into effect, **alleging agency overreach that would make it harder for companies to retain talent.**
Yah, companies should have to work to retain talent. Binding employees into non-competes reduces the competition in the labor market. Workers should be the ones with the leverage, not the company with a million dollar legal team.
I mean, we all knew this would have to work its way through the system.
It’d be good if Congress could actually pass some guidelines around this, it’s a big enough issue. Personally, it’d be good to see some penalty paid by the company to have the non-compete (you pay their salary for the duration of the non-compete, no questions asked, for example).