FTC’s Noncompete Ban Got Struck Down. What Happens Next?

For decades, noncompete employment agreements have prevented all sorts of workers — doctors, engineers, even hair stylists — from easily switching jobs. That was set to change in early September after the US Federal Trade Commission approved a near-total ban on such provisions, but on Aug. 20 a federal judge blocked the rule, saying the FTC lacked the authority to enact it.

The Texas judge sided with business groups like the US Chamber of Commerce, which had sued to halt the ban, and dealt a significant blow to the FTC, which said it intends to appeal. For now, companies that were concerned about having to tear up existing noncompetes “can breathe a sigh of relief,” said Scott Humphrey, an attorney at Benesch, a law firm that represents employers.