Texas Judge Blocks FTC Noncompete Rule

A federal judge in Texas, Ada Brown, has blocked the Federal Trade Commission's (FTC) rule banning noncompete agreements, which would have affected approximately 30 million American workers. The FTC had argued that noncompetes restrict job mobility and suppress wages, estimating that banning them would increase wages by $400 billion over the next decade. Business groups, including the U.S. Chamber of Commerce, sued to stop the rule, arguing that the FTC exceeded its authority. Judge Brown ruled that the FTC lacked substantive rulemaking authority and deemed the rule arbitrary and capricious. The FTC is considering an appeal and will continue to address noncompetes on a case-by-case basis. This ruling is seen as a significant win for business interests and a setback for the Biden administration's regulatory efforts.