A federal judge in Texas appointed by former President Donald Trump has officially spiked the Federal Trade Commission’s plan to ban most noncompete agreements.
U.S. District Judge Ada Brown said Tuesday the FTC did not have the legal authority to create the noncompete ban, which was supposed to go into effect Sept. 4. Brown’s ruling was widely expected after issuing a preliminary injunction against the regulation in July.
However, a separate federal court in Pennsylvania ruled in July the FTC had the power to eliminate most noncompetes and that employers would not be “irreparably harmed” if the rule went into effect. The differing decisions make it likely that appeals courts, and potentially even the Supreme Court, will have to step in.
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