FTC ban on employee non-compete agreements delayed by judge

A federal judge has delayed implementation of the U.S. Federal Trade Commission’s nearly blanket ban on noncompete agreements, the first installment in a bitter legal battle over how much freedom workers should have to move jobs within the industry.

US District Judge Ada Brown in Dallas sided with the U.S. Chamber of Commerce-bsp-bb-link> and a Texas-based tax firm that argued the agency lacked the authority to create rules defining unfair methods of competition. The groups warned that the unprecedented rule would invalidate 30 million employment contracts in a move that “amounts to a massive overhaul of the nation’s economy.”

The ban was set to go into effect on September 4, but will now be put on hold until August while a judge considers the merits of a lawsuit filed by groups seeking to permanently remove the rule from the regulations.

To contact the reporter about this article:
Madlin Mekelburg-bsp-person> in Austin at [email protected]

To contact the editors responsible for this article:
Misyrlena Egkolfopoulou-bsp-person> at [email protected]

Steve Stroth, Peter Blumberg