A federal judge struck down a Biden administration rule on Tuesday that banned employers from using noncompete agreements, which would have affected the contracts of millions of Americans.
U.S. District Court Judge Ada Brown for the Northern District of Texas ruled that the Federal Trade Commission’s (FTC) banning the entire category of noncompetes, rather than targeting “specific, harmful” sub-categories of the agreements, went beyond the commission’s mandate to police unfair methods of competition. The ban on the contracts that limit workers’ ability to move to rival firms, which was announced in April, was supposed to go into effect on September 4 and would have affected roughly 30 million American workers, according to the initial FTC press release.
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