A federal decide may block the Federal Commerce Fee’s pending ban on non-compete agreements from taking impact. Non-compete agreements, that are designed to make it tough for workers to maneuver to comparable positions at different firms or begin their very own companies, are a contentious challenge inside tech firms particularly.
The ban was initially scheduled to take impact on September 4, however on Wednesday, Choose Ada Brown issued a preliminary injunction in a lawsuit in opposition to the Federal Commerce Fee (FTC). For these plaintiffs, the FTC’s injunction will not be in impact on September 4. Brown mentioned she plans to rule on their total problem to the FCC “on or earlier than August 30, 2024,” which may forestall the FTC from blocking non-competes nationwide.
Tax agency Ryan LLC filed a lawsuit in opposition to the FTC on the identical day the April ban was introduced, calling the ban an “unauthorized and unconstitutional try and get rid of long-standing personal financial preparations.” The U.S. Chamber of Commerce and the Enterprise Roundtable are among the many organizations which have joined the lawsuit because it was filed.
Brown wrote that she granted the preliminary injunction as a result of the plaintiffs “are more likely to prevail on their problem to the FTC’s noncompete guidelines.”
“The FTC upholds our clear authority, supported by statute and precedent, to challenge this rule,” FTC spokesman Douglas Farrar wrote in an announcement. “We are going to proceed to “
The FTC voted 3-2 in favor of the ban. On the time, the FTC believed the ban would enable greater than 8,500 new companies to be created annually.
Up to date July 3: Added a brand new assertion from the FTC and clarified when an FTC ban could or could not take impact.