Judge says FTC lacks authority to issue rule banning noncompete agreements
What did the US judge rule regarding the FTC's authority?
The US judge ruled that the Federal Trade Commission (FTC) lacks "substantive" rulemaking authority in its challenge to the rule banning noncompete agreements. The preliminary ruling only blocks enforcement of the noncompete ban against the plaintiff and other groups that intervened in the case, but it signals that the judge believes the FTC cannot enforce the rule.
Which court is handling the case against the FTC's rule?
The case against the FTC's rule banning noncompete agreements is being handled by the U.S. District Court for the Northern District of Texas3.
What does the FTC's noncompete rule aim to ban?
The FTC's noncompete rule aims to ban post-employment non-compete clauses between employers and their workers, including employees and independent contractors. The rule covers almost all non-competes and renders existing non-competes unenforceable for workers, except for senior executives.