FTC’s noncompete ban immediately challenged in Texas district lawsuit

Vindication came swiftly on Wednesday for those who predicted legal challenges to the Federal Trade Commission’s brand-new noncompete ban, which could upend practices in the health care industry.

Four business groups, including the prominent U.S. Chamber of Commerce, filed a lawsuit in the Eastern District of Texas on Wednesday morning, not even a full day after FTC commissioners voted narrowly in favor of the sweeping prohibition on agreements that prevent employees from working for competitors. All four said their members use noncompetes and would be harmed if the rule takes effect.

Texas’ Eastern District has proven a friendly — and popular — venue for those battling the Biden administration’s health care efforts. Last year, three provider lobbying groups withdrew their lawsuits in Washington, D.C. against a federal surprise billing ban to instead support a similar case in the district, which ultimately prevailed.

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