Federal judge temporarily blocks rule banning noncompete contracts

On Wednesday, a Texas federal judge blocked the Federal Trade Commission's (FTC) rule banning noncompete agreements, which are typically used by employers to restrict workers from joining competing businesses for specified periods. The judge stated that the regulation exceeded the FTC's statutory authority.

The FTC rule banning noncompete agreements could potentially affect millions of workers outside the scope of the lawsuit once it is implemented1. Some studies suggest that up to one in five employees, or around 30 million people, are bound by noncompete agreements in the United States1.