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A federal judge could block the Federal Trade Commission\u2019s impending ban on noncompete agreements from going into effect. Noncompete agreements are intended to make it difficult for employees to switch to similar positions at other companies or start businesses of their own, and they\u2019ve been a contentious issue within tech companies in particular.<\/p>\n<\/div>\n
The ban had been set to go into force on September 4th, but on Wednesday, Judge Ada Brown issued a preliminary injunction<\/a> in a lawsuit brought against the FTC. For those plaintiffs, the FTC\u2019s ban will no longer go into effect on September 4th. Brown says she plans to rule on their entire challenge to the FCC \u201con or before August 30, 2024,\u201d potentially stopping the FTC from blocking noncompetes nationwide.<\/p>\n<\/div>\n Tax firm Ryan LLC filed the lawsuit<\/a> against the FTC the same day the ban was announced in April<\/a>, arguing that the ban is \u201can unauthorized, unconstitutional attempt to eliminate a long-established private economic arrangement.\u201d The US Chamber of Commerce and Business Roundtable are among those who have joined the suit since its filing.<\/p>\n<\/div>\n Brown writes<\/a> that she granted the preliminary injunction because the plaintiffs are \u201csubstantially likely to prevail on the merits of their challenge to the FTC\u2019s Non-Compete Rule.\u201d<\/p>\n<\/div>\n \u201cThe FTC stands by our clear authority, supported by statute and precedent, to issue this rule,\u201d reads a statement from FTC spokesperson Douglas Farrar. \u201cWe will keep fighting to free hardworking Americans from unlawful noncompetes, which reduce innovation, inhibit economic growth, trap workers, and undermine Americans\u2019 economic liberty.\u201d<\/p>\n<\/div>\n The FTC voted 3-2 in support of the ban. At the time, the FTC argued<\/a> that the ban would allow for more than 8,500 new businesses to be made each year.<\/p>\n<\/div>\n