By Daniel Wiessner
(Reuters) – A federal judge in Texas on Wednesday partially blocked the implementation of a U.S. Federal Trade Commission rule that bans agreements that workers often sign to not join their employers’ rivals or form competing companies.
U.S. District Judge Ada Brown in Dallas said in a written ruling that the FTC, which enforces federal antitrust laws, does not have the authority to issue broad rules prohibiting practices it considers unfair competition.
According to the FTC, approximately 30 million people, or 20% of U.S. workers, have signed a non-compete agreement.
Brown, appointed by former Republican President Donald Trump, blocked the FTC from enforcing the rule against a coalition of business groups, including the U.S. Chamber of Commerce, the nation’s largest corporate lobby and tax consulting firm Ryan, pending the outcome of their consolidated lawsuits.
The rule will come into effect in September.
(Reporting by Daniel Wiessner in Albany, New York; Editing by Chris Reese and Rod Nickel)
