A federal court partially blocks U.S. ban on noncompetes
What did the Texas federal court rule on noncompetes?
The Texas federal court partially blocked the government's ban on noncompete agreements, which was set to take effect on September 4. Judge Ada Brown granted a preliminary injunction, postponing the effective date of the rule as applied to the plaintiffs, with a final ruling expected on or before August 30, 2024.
Why did Ryan LLC sue over the noncompete rule?
Ryan LLC, a tax services firm, sued over the noncompete rule as they believed the Federal Trade Commission (FTC) overstepped its statutory authority in declaring all noncompetes unfair and anticompetitive. Ryan LLC argued that the ban on noncompetes would inflict "serious and irreparable injuries" on its business, including putting its confidential information at risk and enabling its competitors to poach valuable employees.
What are the projected benefits of the FTC's new rule?
The FTC's new rule banning noncompete agreements aims to promote competition and protect worker freedoms5. Projected benefits include increased job mobility, higher wages, reduced healthcare costs, a rise in innovation, and the creation of new businesses. The FTC estimates that the rule could lead to wage increases totaling nearly $300 billion per year and the creation of 8,500 new businesses annually.