A Trump-appointed judge in Texas has blocked a Biden administration rule banning non-compete agreements, opening up a potential appeal but unlikely to save the ban.
On Tuesday, U.S. District Judge Ada Brown nationwide tossed out the rule, which had been set to take effect Sept. 4, siding with business interests including the Chamber of Commerce. Brown concluded that the Federal Trade Commission lacked the authority to issue the rule and called it “arbitrary and capricious because it is unreasonably overbroad without reasonable explanation.”
In announcing the rule in April, FTC Chair Lina Khan said that noncompete agreements “hold down wages, stifle new ideas, and rob the U.S. economy of dynamism” and that the rule “will ensure that Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.” An FTC spokesperson said after the ruling that the agency was seriously considering an appeal and noted that the judge’s decision does not prevent the agency from “addressing noncompete agreements through case-by-case enforcement actions.”
The government’s prospects on appeal aren’t great, however, as this Supreme Court has generally been skeptical of the agency’s authority and has rejected Biden administration initiatives. The intermediate federal appeals court covering Texas is the 5th U.S. Court of Appeals, whose rulings have sometimes gone too far to the right, even for the Supreme Court.
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This article was originally published on MSNBC.com
