Federal Judge Grants Injunction Against FTC’s Noncompete Agreement Ban

A federal judge, Ada Brown, has issued an injunction in response to a legal challenge against the Federal Trade Commission’s ban on noncompete agreements set to be enforced in September. The injunction was granted to several plaintiffs, temporarily barring the enforcement of the ban until a final ruling is made.

Judge Ada Brown stated that the FTC did not have the authority for substantive rule-making in terms of unfair competition methods and indicated that the plaintiffs were likely to succeed in their challenge. She plans to deliver a final decision by the end of August.

The FTC has defended its position, claiming that they have the necessary authority, backed by law and precedent, to implement the ban. The agency remains committed to advocating for worker mobility and economic progress by opposing noncompete agreements.

In April, the tax firm Ryan L.L.C. initiated a lawsuit to block the comprehensive ban on noncompete agreements immediately after the FTC’s 3-2 vote in favor of the rule. Subsequently, the U.S. Chamber of Commerce, the Business Roundtable, and two Texas business groups joined the legal action as plaintiffs.