A federal judge in Texas has blocked the Federal Trade Commission’s ban on most noncompete clauses.
United States District Judge Ada Brown of Dallas, TX ruled that the FTC “lacks substantive rulemaking authority with respect to unfair methods of competition…The role of an administrative agency is to do as told by Congress, not to do what the agency think[s] it should do.”
The ban was set to take effect Sept. 4, 2024. Read more about the ban and how it could affect dermatology practices here.
Ryan LLC, a tax services firm in Dallas, sued to block the rule after the Federal Trade Commission voted to ban noncompetes for almost all U.S. workers back in April 2024. The tax firm was joined by the U.S. Chamber of Commerce, Business Roundtable, Texas Association of Business and Longview Chamber of Commerce.
An FTC spokesperson, said in a written statement that the agency is “disappointed by Judge Brown’s decision and will keep fighting to stop noncompetes that restrict the economic liberty of hardworking Americans, hamper economic growth, limit innovation, and depress wages. We are seriously considering a potential appeal, and today’s decision does not prevent the FTC from addressing noncompetes through case-by-case enforcement actions.”
Judge Brown had blocked the rule temporarily in July 2024. The decision is now permanent and nationwide in scope, according to media reports.
