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Judge Strikes Down FTC’s Ban on Noncompete Employment Agreements, Calling It ‘Arbitrary and Capricious’


A federal judge blocked the FTC's rule banning noncompete agreements, ruling that the commission lacked authority to implement the ban.

Tax-services firm Ryan LLC, joined by the U.S. Chamber of Commerce and the Business Roundtable lobbying groups, had sued the FTC over the noncompete ban on April 23, the same day the commission announced the rule. On July 3, Brown issued a preliminary injunction blocking enforcement of the FTC ban after finding “there was a substantial likelihood that Plaintiffs would succeed on the merits” and that the rule would “causeirreparable harm.” “The Biden-Harris Administration will keep fighting to empower workers to choose where they work, to start a business, and to get the pay they deserve, and continues to support the Federal Trade Commission’s ban on noncompete agreements,” White House press secretary Karine Jean-Pierre said in a statement to Reuters.

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