The Biden Administration’s Noncompete Ban Has Been Overturned By A US Judge

A federal judge in Texas has blocked a new rule from the U.S. Federal Trade Commission (FTC) that would have banned worker noncompete agreements. U.S. District Judge Ada Brown in Dallas ruled that the FTC, which enforces antitrust laws, does not have the authority to implement such a sweeping prohibition. The rule, which was scheduled to take effect on September 4, aimed to prevent agreements that restrict workers from joining competing businesses or starting their own.

Judge Brown had previously issued a temporary hold in July while reviewing a challenge from the U.S. Chamber of Commerce and tax firm Ryan. In her ruling, Brown criticised the FTC for not providing sufficient evidence to support a broad ban on noncompete agreements, calling the rule “arbitrary and capricious.”

Chamber of Commerce President Suzanne Clark hailed the decision as a victory, arguing that the ban would have negatively impacted workers and businesses. The FTC’s rule was approved in May by a 3-2 vote and aimed to address concerns about competition and wage suppression.