Trump-Appointed Judge Blocks Biden’s Ban On Noncompete Agreements

A federal judge in Texas has blocked the Federal Trade Commission from moving forward with its ban on noncompete agreements, jeopardizing a major reform pursued by President Joe Biden.

U.S. District Judge Ada E. Brown of the Northern District of Texas issued the nationwide order on Tuesday, just two weeks before the rule was slated to go into effect. Brown, an appointee of former President Donald Trump, ruled that the FTC does not have the power to pursue such a broad ban and called it “arbitrary and capricious.”

Employers use noncompete agreements to prevent workers from taking jobs with competing firms. Once the domain of higher-paid, executive-level positions, the agreements are now found throughout the economy, including in low-wage sectors.

The FTC approved the ban in a 3-2 vote in April, with the commission’s three Democrats in favor and two Republicans against it.

The agency has said that banning noncompete contracts would give millions of workers more leverage in the labor market, boosting their pay and improving their working conditions. It estimates that the ban would increase wages by between $400 billion and $488 billion over a decade.

The case before Brown is one of a handful that employers and business groups have mounted to challenge the anti-noncompete rule’s legality and stop it from taking effect.

Victoria Graham, an FTC spokesperson, said the agency was “disappointed” in Brown’s decision and that is “seriously considering” an appeal.

“Today’s decision does not prevent the FTC from addressing noncompetes through case-by-case enforcement actions,” Graham said in an email.

A federal judge in Pennsylvaniarecently reached the opposite conclusion, ruling that the FTC likely has the authority to ban