A Texas judge blocks the FTC’s non-compete ban, halting the rule that aimed to prevent workers from joining rival companies, impacting millions across the U.S.
In Texas a judge on Tuesday barred a U.S Federal Trade Commission rule from taking place that would stop agreements signed by workers to not join their employers' rivals or competing businesses. The Democratic-controlled FTC approved the ban on non compete agreements in a 3-2 vote in May. This block comes out of nowhere as this prevents the FTC from addressing non completers through case-by-case actions. The agency did not justify the move of basically wiping out all non compete agreements. The judge in Texas (Ada Brown) said the FTC does not have the authority to ban practices it deems unfair methods of competition by adopting broad rules. Brown blocked the rule in July and considered a bid by the chamber of commerce. The rule was originally set to take effect Sept. 4. In the United States there are around 30 million people or about 20% of the workers that make up the U.S workforce have signed non competes.This ruling could affect many around the country as well as businesses who fear their trade secrets are at risk.
