The FTC’s ban against noncompete agreements is under threat

A national justice has partially blocked the Federal Trade Commission’s impending prohibition connected noncompete agreements from going into effect. The prohibition had been acceptable to spell into unit connected September 4th, but connected Wednesday, Judge Ada Brown issued a preliminary injunction successful a suit brought against the FTC.

Tax steadfast Ryan LLC filed the lawsuit against the FTC the aforesaid time the prohibition was announced successful April, arguing that the prohibition is “an unauthorized, unconstitutional effort to destruct a long-established backstage economical arrangement.” The US Chamber of Commerce and Business Roundtable are among those who person joined the suit since its filing.

The plaintiffs are “substantially apt to prevail connected the merits of their situation to the FTC’s Non-Compete Rule,” Brown writes successful the preliminary injunction. Brown intends to regularisation “on the eventual merits of this enactment connected oregon earlier August 30, 2024,” according to the order.

“The FTC stands by our wide authority, supported by statute and precedent, to contented this rule,” FTC spokesperson Douglas Farrar said successful a statement. “We volition support warring to escaped hardworking Americans from unlawful noncompetes, which trim innovation, inhibit economical growth, trap workers, and undermine Americans’ economical liberty.”

The FTC voted 3-2 successful enactment of the ban. At the time, the FTC argued that the prohibition would let for much than 8,500 caller businesses to beryllium made each year.

Update July 3rd: Added connection from the FTC.