07.03.24
Judge Backs Challenge to FTC's Noncompete Ban, for Now
by: Danielle Kaye
A federal judge backed an initial legal challenge to the U.S. Federal Trade Commission’s (FTC) ban on noncompete agreements, which is scheduled to take effect in September. Judge Ada Brown granted an injunction requested by several plaintiffs, saying the ban cannot be enforced against them pending a final ruling. She added that the FTC lacked “substantive rule-making authority” with respect to unfair methods of competition and that the plaintiffs were “likely to succeed on the merits” of their challenge. Business groups argue that the ban would limit their ability to protect trade secrets and confidential information. They assert that the FTC lacks constitutional and statutory authority to adopt its proposed rule. Another lawsuit seeking to block the rule is pending in federal court in Pennsylvania. An earlier Supreme Court decision to limit the broad regulatory power of federal agencies could raise the agency’s legal hurdles.
Read the full article on The New York Times