In a significant legal decision with nationwide implications, U.S. District Judge Ada Brown in Texas has set aside the Federal Trade Commission's (FTC) ban on non-compete agreements. The ruling, issued late yesterday, concluded that the FTC's rule was "arbitrary and capricious" and that the Commission lacked the statutory authority to enforce such a ban.
The now-blocked rule was scheduled to take effect on September 4, 2024, and would have rendered most non-compete agreements unenforceable across the United States. Judge Brown's decision means the rule will not be implemented as planned.
The ruling comes in response to a legal challenge filed by a coalition of business groups, including Ryan LLC, the Chamber of Commerce of the United States of America, Business Roundtable, Texas Association of Business, and Longview Chamber of Commerce. The plaintiffs argued that the FTC overstepped its authority in issuing the rule, with Ryan LLC specifically citing violations of the Administrative Procedure Act.
NAHC actively opposed the FTC's non-compete rule during the rulemaking process, raising concerns about its potential impact on the home care industry. This decision marks a victory for businesses that rely on non-compete agreements to protect their competitive interests.
The ruling is not limited to the specific parties in the case but applies nationwide, effectively halting the FTC's efforts to enforce the ban from its intended start date, onwards.
Read Judge Brown's decision here.
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Kristen Wheeler
Executive Director, Private Duty Home Care at NAHC
NAHC-NHPCO Alliance
Washington DC
+1 (202) 547-7424
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