A federal judge granted an injunction on Wednesday in favor of a legal challenge against the Federal Trade Commission’s upcoming ban on noncompete agreements, set to be enforced in September. Judge Ada Brown ruled in favor of several plaintiffs, stating that the ban cannot be applied to them until a final decision is made.
While the ruling is preliminary, Judge Brown highlighted that the FTC did not possess the authority for substantive rule-making regarding unfair methods of competition. She also mentioned that the plaintiffs had a high likelihood of success in their challenge. The final decision is expected to be issued by the end of August.
The FTC spokesperson, Douglas Farrar, reiterated the agency’s stance on their authority to implement the noncompete ban, emphasizing the goal of promoting worker mobility and economic growth through such regulations.
Earlier in April, the tax firm Ryan L.L.C. initiated legal action to halt the comprehensive ban on noncompetes immediately after the FTC’s 3-2 vote in favor of the rule. The U.S. Chamber of Commerce, the Business Roundtable, and two Texas business groups later joined the lawsuit as plaintiffs.
