Texas Federal Judge Denies FTC Bid To Ban Non Compete Agreements

A federal judge in Texas has halted a new Federal Trade Commission (FTC) rule that would have simplified the process for employees to leave their jobs and join competing firms.

Overstepping Authority

On Tuesday, U.S. District Judge Ada Brown ruled in favor of a summary judgment request by the U.S. Chamber of Commerce and other plaintiffs, denying the request made by the FTC for a ruling in its favor. Judge Brown determined that the FTC had overstepped its legal authority with the rule, labeling it as arbitrary and capricious, and also found that it would result in significant, irreparable damage.

Consequently, the FTC will not be able to enforce the rule, which was scheduled to take effect on September 4th, as per the decision made by the judge. However, this ruling does not stop the agency when it comes to addressing non-compete agreements through individual enforcement actions, according to FTC spokesperson Victoria Graham.

Appealing The Decision

The FTC is also considering whether to appeal the decision, Graham noted. In April, the FTC decided to ban employers across the nation when it comes to entering into new non-compete agreements or enforcing existing ones, arguing that such agreements limit workers in terms of their freedom and overall wages.

Crypto remains to be very popular in Texas due to the favorable regulatory environment in the state alongside low energy costs, and strong tech infrastructure. These factors attract investors and companies looking for a supportive environment for digital currency ventures.