FTC’s Noncompete Ban Blocked by Federal Judge

Back in April, a vote by the Federal Trade Commission (FTC) to ban the majority of noncompete agreements was passed. Last week, however, a federal judge blocked the ban which was slated to go into effect Sept. 4. 

As reported by The Hill, the ban — which barred workers from leaving their respective companies to either start their own or join a competitor — has received pushback from several business entities including the Business Roundtable and U.S. Chamber of Commerce, taking legal action to prevent it from going into effect. Paramount concerns from those against the ban centered on employee retention.

The ban was blocked by U.S. District Judge Ada Brown in Dallas, who noted that the FTC should not have the ability to cast a rule with what she considered arbitrary standards. Suzanne P. Clark, CEO of the Chamber of Commerce, praised the decision, noting that the government should not be micromanaging the decisions of individual businesses. 

The FTC expressed disappointment with the decision to block the ban, noting that noncompetes restrict the ability of employees to pursue individual goals as either an entrepreneur or employee, limiting economic growth in the process.

As it stands, the FTC has considered appealing the decision. For more information on the initial ban that was passed, click here.