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Businesses The Courts

Federal Judge Strikes Down Ban On Worker 'Noncompete' Agreements (reuters.com) 173

U.S. District Judge Ada Brown in Dallas blocked the FTC's rule banning noncompete agreements, arguing the FTC lacks authority to implement such broad regulations and did not adequately justify the sweeping prohibition. Reuters reports: Brown had temporarily blocked the rule in July while she considered a bid by the U.S. Chamber of Commerce, the country's largest business lobby, and tax service firm Ryan to strike it down entirely. The rule was set to take effect Sept. 4. Brown in her ruling said that even if the FTC had the power to adopt the rule, the agency had not justified banning virtually all noncompete agreements. "The Commission's lack of evidence as to why they chose to impose such a sweeping prohibition ... instead of targeting specific, harmful non-competes, renders the Rule arbitrary and capricious," wrote Brown, an appointee of Republican former President Donald Trump.

FTC spokesperson Victoria Graham said the agency was disappointed with the ruling and is "seriously considering a potential appeal." "Today's decision does not prevent the FTC from addressing noncompetes through case-by-base enforcement actions," Graham said in a statement. The Democratic-controlled FTC approved the ban on noncompete agreements in a 3-2 vote in May. The commission and supporters of the rule say the agreements are an unfair restraint on competition that violate U.S. antitrust law and suppress workers' wages and mobility.

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Federal Judge Strikes Down Ban On Worker 'Noncompete' Agreements

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  • by sinkskinkshrieks ( 6952954 ) on Tuesday August 20, 2024 @05:49PM (#64722046)
    Corporate corruption continues to put its thumb on the scale.
    • by schwit1 ( 797399 ) on Tuesday August 20, 2024 @06:29PM (#64722106)

      I agree that non-competes are wrong, but the judge is doing his job correctly. Executive agencies are there to enforce the law not make the law.

      It is the job of Congress and not unelected bureaucrats to make these laws.

      • by dnaumov ( 453672 ) on Tuesday August 20, 2024 @06:31PM (#64722112)

        I agree that non-competes are wrong, but the judge is doing his job correctly. Executive agencies are there to enforce the law not make the law.

        It is the job of Congress and not unelected bureaucrats to make these laws.

        This is completely and entirely unfeasible and isn't really in any country of reasonable size. Whatever parliamentary system you have will be overwhelmed by the vastness of legislation to enact.

        • by e3m4n ( 947977 )

          If you write laws correctly you dont have to keep making laws to deal with changes. Its the poorly written ones that require changes. We have plenty of laws already that cover most crime, just because its done with bitcoin doesnt magically make it not theft. Just write laws that 1) do bot declare a dollar amount because they cant adjust to inflation. And 2) are written to cover the crime not the specific mechanism to carry it out.

        • by mjwx ( 966435 )

          I agree that non-competes are wrong, but the judge is doing his job correctly. Executive agencies are there to enforce the law not make the law.

          It is the job of Congress and not unelected bureaucrats to make these laws.

          This is completely and entirely unfeasible and isn't really in any country of reasonable size. Whatever parliamentary system you have will be overwhelmed by the vastness of legislation to enact.

          Which is why we have courts to point out and if need be, smack down when a bureaucracy gets out of line.

          Lawmakers are meant to manage the bureaucracy, ensuring that they're behaving in accordance with the law (letter and/or spirit) but can't feasibly be able to discuss every single policy or decision. Granted this is a pretty big one, so a ball has been dropped here (or was deliberately put down).

        • by laughingskeptic ( 1004414 ) on Wednesday August 21, 2024 @10:17AM (#64723866)
          This is a widely held and completely false notion held by many Americans -- often those who watch Fox News:

          Executive agencies are there to enforce the law not make the law.

          Laws where Congress delegates rule-making by agencies THAT HAVE THE FORCE OF LAW have been being created since the establishment of the Department of the Treasury on September 2, 1789 -- The third department created by Congress after the Department of State and the Department of War. The first agency created almost purely for rule-making purposes was the Interstate Commerce Commission (ICC) in 1887.

          Congress only passed 27 bills in 2023 -- there is no way the U.S. Government could function if every decision had to be passed as congressional legislation.

      • Re: (Score:3, Interesting)

        by drinkypoo ( 153816 )

        It is the job of Congress and not unelected bureaucrats to make these laws.

        This is of course total bullshit. Congress passed laws which created these positions where they make regulations (not laws, which are created by congress, just like you think it doesn't work but does) so you are getting exactly what you just asked for, but you don't want it. However, you understand too little of how our government functions to understand that you're already getting what you asked for, because you didn't pay attention in civics class, or apparently any time since.

        • It is the job of Congress and not unelected bureaucrats to make these laws.

          This is of course total bullshit.

          It's no such thing. Nowhere in the Constitution are any of the three branches allowed to offload their responsibilities to another agency. Regulating commerce, specifically, is specified as the job of Congress. Nowhere does it say "Congress may create an agency to make regulations without Congressional say-so".

          If you want what would be a fourth branch of government... a regulating bureaucracy... then you're simply going to have to pass a congressional amendment to make it. And yes, that would be politically

      • t is the job of Congress and not unelected bureaucrats to make these laws.

        The judge who made this ruling is an "unelected bureaucrat".

        • by dgatwood ( 11270 ) on Wednesday August 21, 2024 @01:05AM (#64722672) Homepage Journal

          It is the job of Congress and not unelected bureaucrats to make these laws.

          The judge who made this ruling is an "unelected bureaucrat".

          Ah, but in their weird world, it's okay for unelected bureaucrats to prevent a law from being enforced, but not for them to cause a law to be enforced. [rolls eyes]

          My favorited part was this:

          "The Commission's lack of evidence as to why they chose to impose such a sweeping prohibition ... instead of targeting specific, harmful non-competes, renders the Rule arbitrary and capricious."

          No, it's the opposite of that. By not having a giant pile of loopholes, it renders the rule straightforward and not in need of constant tweaking.

          There's no such thing as a non-harmful non-compete. Every non-compete agreement, by definition, makes it harder for people to change jobs, which, in turn, makes it harder for them to negotiate salaries and perks, harder for them to get away from abusive bosses, less safe for them to report harassment, less safe for them to report fraud and embezzlement, and so on.

          Basically, a non-compete agreement brings employees several steps closer to slavery or serfdom. Now rewrite that sentence as "Lincoln's lack of evidence as to why he chose to impose such a sweeping prohibition ... instead of targeting specific, harmful forms of slavery, renders the Emancipation Proclamation arbitrary and capricious" and you'll understand just how absolutely STUPID this ruling is from my perspective.

          More to the point, the very fact that employers have to make non-compete agreements mandatory to get employees to agree to them almost prima facie means that they must be bad for employees.

          I really don't get how even a judge in an ultra-conservative state could be that clueless about the chilling effect that non-competes have on salaries, on mobility, on equal pay across gender and race boundaries, and so on. It's truly mind-boggling to me.

          • by DarkOx ( 621550 )

            Ah, but in their weird world, it's okay for unelected bureaucrats to prevent a law from being enforced, but not for them to cause a law to be enforced. [rolls eyes]

            Right in our weird world it is ok for government to be prevented from limiting the freedom of others (in this case the freedom to make contracts) but not okay for government to limit freedoms without democratic process. [Shakes head at the freedom hater!]

            Yes we support limited government, you know the social contract we all have been born into or accepted if we chose to become citizens later. We damn well want to make sure petty tyrants and wannabees like don't get to just take it away without us having sa

            • We damn well want to make sure petty tyrants and wannabees like don't get to just take it away without us having say so.

              So why are conservatives supporting trump, the guy who tells us he wants to be a dictator? What a stupid argument you've got there.

              The fact is that congress has the ability to regulate these organizations they have created, so once again, you already have what you want. Congress is already the oversight on these agencies. Since you already have what you are asking for, you either have no fucking idea how anything works at all, or you are actually expecting something else.

          • I really don't get how even a judge in an ultra-conservative state could be that clueless about the chilling effect that non-competes have on salaries, on mobility, on equal pay across gender and race boundaries, and so on. It's truly mind-boggling to me.

            Clueless? Not at all. She's just doing exactly what her Big Business Buddies tell her to do. She was nominated to the district court by Trump and, well, it's Texas, what do you expect?

          • It is the job of Congress and not unelected bureaucrats to make these laws.

            The judge who made this ruling is an "unelected bureaucrat".

            Ah, but in their weird world, it's okay for unelected bureaucrats to prevent a law from being enforced, but not for them to cause a law to be enforced. [rolls eyes]

            Judges are not "bureaucrats". They're judges, and they're on the bench and doing what they do specifically because the Constitution mandates it that way.

            • by dgatwood ( 11270 )

              It is the job of Congress and not unelected bureaucrats to make these laws.

              The judge who made this ruling is an "unelected bureaucrat".

              Ah, but in their weird world, it's okay for unelected bureaucrats to prevent a law from being enforced, but not for them to cause a law to be enforced. [rolls eyes]

              Judges are not "bureaucrats". They're judges, and they're on the bench and doing what they do specifically because the Constitution mandates it that way.

              Definition of bureaucrat: "an official in a government department, in particular one perceived as being concerned with procedural correctness at the expense of people's needs."

              What part of that definition do you claim that this judge doesn't fall under? Are you claiming that the Judicial Administration isn't a federal department?

              And no, the constitution does not mandate that justices interpret the constitution in a particular way. That would be oxymoronic.

      • by ceoyoyo ( 59147 )

        Typically the legislative part of a government makes laws, the executive part makes policies compatible with those laws, and the judicial branch decides whether they succeeded. The structure stems from the evolution of legislative bodies as checks on royal power, not the appointment of kings as some kind of uber cop "enforcing the law."

        It also seems weird that the FTC apparently has the (legislatively supported) power to strike down particular noncompetes but not all of them. Also that somebody telling you

      • by jvkjvk ( 102057 )

        Congress sets out the overall provisions of the laws.
        Then the regulatory agencies step in to implement them in the way that the Executive wishes them to be implemented.
        They have experts, scientists, public comments, etc.
        This was well within the FTC's authority and I hope they appeal, although with the corruption of the Supreme Court it may be moot.

      • by Pascoea ( 968200 )
        False on two accounts. What is under contention is not a law, it's a rule. And executive agencies are there to execute the duties they were assigned by congress, which includes making rules that are under the purview of their agency. It would be literally impossible for congress to enact legislation that covers even a fraction of a fraction of a fraction of what an agency like the FTC is responsible for.
      • by gtall ( 79522 )

        The judge is female and a nominee of the former alleged president. She's just paying back her minders.

      • by aitikin ( 909209 )

        I agree that non-competes are wrong, but the judge is doing his job correctly. Executive agencies are there to enforce the law not make the law.

        It is the job of Congress and not unelected bureaucrats to make these laws.

        But non-competes are largely unenforceable. Why should it be legal to include an unenforceable term into a contract?

      • by flink ( 18449 )

        That is not even remotely for the last 70 years. Congress has delegated rule making authority to agencies which make legally binding rules & regulations under the law that created the agency. If what you wanted were true, then every federal regulation should be struck tomorrow and the country would grind to a halt and the economy would collapse.

  • by Arzaboa ( 2804779 ) on Tuesday August 20, 2024 @05:55PM (#64722052)

    Apparently, "Because it is abusive to the little guy", doesn't mean anything in the eyes of the law. Think of the business!

    Big business wins again.

    --
    The incestuous relationship between government and big business thrives in the dark. - Jack Anderson

    • by ArchieBunker ( 132337 ) on Tuesday August 20, 2024 @06:52PM (#64722150)

      No you are witnessing the damage by judges who were appointed because of their political allegiance and not their credentials or impartiality. Trump appointed hundreds of judges and this is only going to get worse. https://en.wikipedia.org/wiki/... [wikipedia.org]

    • "U.S. Chamber of Commerce, the country's largest business lobby" repeats a common mistake. The U.S. Chamber of Commerce is not your local Chamber of Commerce. It consists of large companies, mooching on the term Chamber of Commerce. The CoC's used to be a big deal for a long time in America, pushing their local towns. Since people have turned away from their local merchants and buy from the likes of Amazon, the local small companies and mom & pops' stores have shriveled away. The local CoC's are fa
    • by JBMcB ( 73720 )

      Apparently, "Because it is abusive to the little guy", doesn't mean anything in the eyes of the law.

      That's interesting phraseology. There is no law. That's the problem. Congress needs to pass a law banning noncompete clauses. The FTC can't do anything it wants to. It can only do what congress lets it.

      I'd wager you were fine with the courts overturning Trump's immigration bans, which were knocked down for the exact same reason. Congress didn't say he could do it.

    • by Etcetera ( 14711 )

      Apparently, "Because it is abusive to the little guy", doesn't mean anything in the eyes of the law. Think of the business!

      I know this is difficult for some people to understand, but just because you're the little guy doesn't mean you're right.

  • by OrangeTide ( 124937 ) on Tuesday August 20, 2024 @05:57PM (#64722054) Homepage Journal

    Time to man/woman up and do your job. Agencies can keep things running in their narrow scope. But eventually the legislature has to make the bigger decisions. It's kind of why we have a representative government.

    Represent my interests, the voter that has to work a job and negotiate an asymmetric contract with my employer. Because if you guys drag your feet one more time. Or worse, represent the interests of the ones who cut you the biggest check at the last campaign luncheon. We're going to start voting you out of office. I don't care if I have to vote in a bunch of wild-eyed socialists. It's gotta be better than the bunch of corporate cocksuckers we have today.

    • by e3m4n ( 947977 )

      Every single member of congress seems to think that only large companies create jobs. So those companies get to influence and boss these idiots around. The fact is 80% of all businesses in the US have fewer than 20 employees. So even when your democraps/or rethuglicans pretend to champion rights for you, they only impose them on companies with more than 100 employees. Aka just 5 % of all businesses. Imagine the 13th amendment only applying to plantations with 50 people or more. If these assholes had been in

    • by flink ( 18449 )

      1) There are not enough days in the year to make all the tweaks the existing regulations through congress, never mind creating new regulations.

      2) The current political environment is so polarized that essentially nothing would pass.

    • They delegated the authority to the FTC. The courts have been corrupted by Pro-Corporate interests and the reason you're constantly seeing people say leave it to the legislation is because it's impossible for the legislation to legislate everything.

      The people telling you to leave it to Congress are using that as a trick to paralyze the government and prevent any regulation of their out of control extremist corporate agenda. The idea is to grind the government to a halt under minutiae. Meanwhile their cr
    • by Jerrry ( 43027 )

      We're going to start voting you out of office.

      Dream on, dude!

  • All noncompetes are harmful.

  • by istartedi ( 132515 ) on Tuesday August 20, 2024 @06:07PM (#64722068) Journal

    If only there were a definition for doing things (or not doing things) on behalf of another entity without compensation. If only there were an amendment to prevent that kind of exploitation. While it may lead to some Civil Tension, I think we need to do whatever is necessary to ensure this institution comes to an end; but I Dred the implications.

    • If only there were a definition for doing things (or not doing things) on behalf of another entity without compensation. If only there were an amendment to prevent that kind of exploitation.

      Instead, the thirteenth amendment explicitly protects forcing people to do things (or not do things) on behalf of another entity without compensation so long as the subjects have committed a crime — any crime. And there are a lot of people on this forum who are in favor of that, which you can tell because the penalty for bringing up this simple fact will usually get you modbombed. Apparently the same people who like to berate people for not reading the constitution really don't like it when people do

      • I know about that loophole; but didn't think it was applicable here. OTOH, if they want to be so insidious as to make violation of employment terms a crime then, yeah... that's a gateway to some truly awful stuff.

      • by ceoyoyo ( 59147 )

        so long as the subjects have[n't] committed a crime

        No, so long as you haven't been duly convicted of a crime. It also says "as punishment" which means you're no longer eligible for slavery after you've served your sentence.

        Yes, it's an example of of antique shittiness in the US constitution. No, it doesn't have anything to with somehow justifying non-compete clauses.

    • by cstacy ( 534252 )

      If only there were a definition for doing things (or not doing things) on behalf of another entity without compensation. If only there were an amendment to prevent that kind of exploitation. While it may lead to some Civil Tension, I think we need to do whatever is necessary to ensure this institution comes to an end; but I Dred the implications.

      Great Scott! What kind of crazy talk is this?

  • Seems backwards (Score:5, Insightful)

    by fahrbot-bot ( 874524 ) on Tuesday August 20, 2024 @06:20PM (#64722092)

    The Commission's lack of evidence as to why they chose to impose such a sweeping prohibition ... instead of targeting specific, harmful non-competes, renders the Rule arbitrary and capricious," ...

    So a blanket ban is arbitrary, and capricious, while one where they pick and choose isn't. I'm imagining the situation where the FTC only banned certain ones and the Chamber of Commerce and judge then offered the same reasoning that the specific choices were arbitrary and capricious. Also, harmful for whom? Seems like they all are for employees.

    • by JBMcB ( 73720 )

      So a blanket ban is arbitrary, and capricious, while one where they pick and choose isn't.

      There are different types of non-competes. If you are a chemical engineer working for LG battery, a non-compete that prevents you from working for direct competitors like Panasonic or A123 for a year makes sense. A non-compete that prevents you from working as a chemical engineer for any battery company doesn't.

      The ban should have picked out the more harmful non-compete terms. It banned everything.

    • I would not agree that it's arbitrary or capricious. But a very good argument exists that it is unlawful and/or unconstitutional. It's not even clear whether banning is a good idea for higher level employees.

  • Hilarity ensues (Score:5, Informative)

    by quonset ( 4839537 ) on Tuesday August 20, 2024 @06:55PM (#64722160)

    Recently, Neil Gorsuch said in his book [apnews.com], there are too many laws. And yet, here we are with the courts saying this agency can't ban noncompete clauses. What does that mean? It means Congress now has to write a law to do so. The very thing Gorsuch whines about. Perhaps he and the other miscreants who are trying to lobotomize this country should have thought through their ruling. Or maybe they did and don't care. They can keep mouthing, "Not true" despite the clear evidence to the contrary.

    As an aside, this is the idiot who, unsurprisingly, twists reality to suit his needs when he says:

    “Here we have, for the first time in our history, one presidential administration bringing criminal charges against a prior president. It’s a grave question, right? Grave implications,” Gorsuch said.

    No, it's not a grave question. Attempting to overturn a democratic eleciton just because you lost doesn't fall anywhere in presidential powers, nor is trying to use the Justice Department to do so, nor is telling election officials to find votes. That such a simple issue could be wholly misconstrued shows why we need to have justices who don't get their degrees from a cereal box. The next thing he'll tell us is storing classified documents in a bathroom at your house isn't a big deal.

    • by bussdriver ( 620565 ) on Wednesday August 21, 2024 @09:50AM (#64723748)

      Silicon Valley exists because of the ban on non-competes.

      Fools do not realize complex and advanced societies need MORE regulation and MORE laws. Lets get rid of nuclear regulations because we reached the cap on laws! Chemistry didn't exist at the founding and the constitution says nothing about limiting the use of chemistry...

      Gorsuch is corrupt and doesn't even seem to be trying to look good anymore. There is a spectrum and often people slide down it over time as they adjust to their increased level of corruption. This is the main reason for term limits; although, some great people never slide down over time and it's a shame to lose them when you can find them. One can just hope each reboot starts at a better place, but Gorsuch was pretty bad at the start but seems to have mostly dropped the act of impartiality.

      Contacts are enforced by legal regulations! by government! Private regulations people agree to mean NOTHING without enforcement. I can sell my child into slavery by signing a contract but nobody will enforce that; not anymore... except if Gorsuch wants to be original intent about it... (simply call it something else to avoid the amendment banning "slavery" and play some more Gorsuch word games!)

    • Yeah, it's a grave question. There was only one other time in history that we had a crook for a president. He resigned and then the Vice President pardoned him. I doubt that if Trump had resigned, Pence would have pardoned him. But Biden might have. But then Trump left office and continued to commit more crimes. To the best of our knowledge, that has never happened before.
  • California has anti-non-compete laws, but the GOP-packed SCOTUS could end up overturning it. Blue states have mostly been a sanctuary from Evangelical Inc. laws, but SCOTUS and/or having GOP in both chambers could kick such laws in the gender-non-specific genitals.

    • While I don't have much faith in most of the Supreme Court making decisions based on the Constitution and laws, the degree to which they'll stretch varies quite a bit among the judges. To overturn California's law, they would have to rule exactly what part of the Constitution the law violates, and I'm having trouble thinking of an argument that's even remotely logical. I would expect Roberts to vote that it does not violate the Constitution, and I could see Gorsuch and maybe even Barrett or Kavanaugh voting
  • Judge Ada Brown was appointed by Trump, so that for sure shows you that she passed the fealty to the Republican Party and its ideals test to get nominated in the first place.
  • ... did not adequately justify the sweeping prohibition ...

    Yes, that's why Texan laws against all abortions, are wrong: Pot meet kettle.

  • Amazing how the conversation changes in here to "Federal agencies shouldn't have legislative power" and no one is actually arguing whether anti-compete clauses are a good or bad thing. Classic anti-consumer tactic...distract by saying that it's an overreach of power and never talk about it again.

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