Federal Judge Blocks FTC Rule on Noncompete Agreements

A federal judge in Florida has temporarily blocked the FTC's proposed national ban on noncompete agreements, pending the outcome of a specific lawsuit. The FTC aims to curb such agreements which it sees as anti-competitive and restrictive for workers, but faces opposition claiming only Congress has the authority to pass such measures.

A federal judge in Florida has temporarily thwarted the FTC's rule banning noncompete agreements, marking the second judicial opposition to the measure. Judge Timothy Corrigan's ruling stops the FTC from applying the ban against real estate developer Properties of the Villages while their lawsuit proceeds, asserting that Congress alone holds such legislative power.

About 20% of U.S. workers have signed noncompetes, hindering job mobility and wage growth, according to the FTC, which continues its legal battles to enact the rule nationwide on Sept. 4. FTC spokesman Douglas Farrar emphasized commitment to ending unfair noncompete practices despite the limited nature of Corrigan's ruling.

Supporters argue that the ban boosts wages and job mobility, but business groups, supported by Republicans, contend it protects trade secrets and investments in workforce training. Other courts remain divided on the issue, with varying rulings from judges across the country.