Federal Judge Partially Blocks US Ban On Noncompetes

ZipNada writes: A federal court in Texas has partially blocked the government's ban on noncompete agreements that was set to take effect September 4. An estimated 30 million people, or one in five American workers, are bound by noncompetes. The employment agreements typically prevent workers -- everyone from minimum wage earners to CEOs -- from joining competing businesses or launching ones of their own. In its complaint, Ryan LLC accused the FTC of overstepping its statutory authority in declaring all noncompetes unfair and anticompetitive. Judge Brown agreed, writing, "The FTC lacks substantive rulemaking authority with respect to unfair methods of competition." Through a statement Wednesday evening, the FTC said its authority is supported by both statute and precedent. "We will keep fighting to free hardworking Americans from unlawful noncompetes, which reduce innovation, inhibit economic growth, trap workers, and undermine Americans' economic liberty," wrote FTC spokesman Douglas Farrar. The FTC has long argued that noncompetes hurt workers.

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