A federal judge in Texas has recently blocked the Federal Trade Commission’s (FTC) rule banning noncompete agreements, arguing that the FTC overstepped its authority. The rule, which was set to take effect on September 4, aimed to eliminate noncompetes for nearly all U.S. workers, a move the FTC believed would increase wages, foster innovation, and support economic growth. However, Judge Ada Brown ruled that the FTC lacks the statutory authority to impose such a ban, labeling the rule as “arbitrary and capricious” and stating it could cause irreparable harm to businesses.

This decision comes after Ryan LLC, a Dallas-based tax services firm, sued to block the rule. They argued that noncompetes are necessary for protecting confidential information and investments in training. While the FTC is considering an appeal, the ruling prevents the ban from taking effect, at least for now.

For more details, you can read the full article on NPR’s website here.