A federal judge in Texas has blocked the implementation of a new rule by the Federal Trade Commission (FTC) that would ban noncompete agreements, questioning the FTC’s authority to impose such restrictions.
Judge Ada Brown, who had previously issued a temporary block, criticized the FTC for failing to adequately justify the near-total ban on these agreements, calling the rule “arbitrary and capricious.”
This decision adds to a series of conflicting judicial opinions in other states, where recent rulings have been issued both for and against the validity of the ban.
The FTC will likely appeal the ruling, extending a legal battle impacting workers and businesses nationwide.
