Non-competes

[Bevo 13596]

U.S. judge strikes down FTC ban on noncompete clauses

Ban will likely not go into effect Sept. 4

 

 

A federal judge in Texas struck down a U.S. Federal Trade Commission rule that would have prevented employers from enforcing most existing noncompete clauses and requiring new workers to sign noncompete clauses. The ban was scheduled to go into effect nationwide Sept. 4. 

U.S. District Judge Ada Brown wrote in her ruling that the federal agency exceeded its statutory authority when it approved the ban and the noncompete rule is “arbitrary and capricious.”

“The court concludes that the FTC lacks statutory authority to promulgate the noncompete rule, and that the rule is arbitrary and capricious. Thus, the FTC’s promulgation of the rule is an unlawful agency action,” she wrote. 

The FTC issued the final rule April 23, which would have banned for-profit employers from entering into new noncompetes to anyone. It would have also made most existing agreements unenforceable after the effective date. Specifically, existing noncompetes would remain in force for those senior executives earning more than $151,164 annually and who are in policy-making positions. 

For now, employers can now continue to use noncompete agreements, but it is unclear whether or not the FTC will appeal, and if so, seek an emergency order to enact the rule while the appeal plays out.  

[Captainant 27726]

Can't be giving hourly workers any sort of ability to push back on shitty bosses, now! It's critical to their business model to force sandwich artists and baristas to sign noncompetes to suppress wages amirite?

It's wild how decoupled from reality the judiciary can be sometimes, noncompetes are used for waaaaay more than high level roles with trade secrets. They're regularly abused as a way to take away bargaining power from workers. Can't buck for better wages if you can't get a job anywhere else

[Deej 76897]

There's workarounds...

 

[Wiler77 1567]

 

 

[Celery Man 20996]

https://en.wikipedia.org/wiki/Ada_Brown_(judge)

[TwiceHorn 31529]

7 hours ago, Bevo said:

“The court concludes that the FTC lacks statutory authority to promulgate the noncompete rule, and that the rule is arbitrary and capricious. Thus, the FTC’s promulgation of the rule is an unlawful agency action,” she wrote. 

 

Bullshit.  She fucked up, It was major questions she was after.

§45. Unfair methods of competition unlawful; prevention by Commission

(a) Declaration of unlawfulness; power to prohibit unfair practices; inapplicability to foreign trade

(1) Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.

(2) The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, savings and loan institutions described in section 57a(f)(3) of this title, Federal credit unions described in section 57a(f)(4) of this title, common carriers subject to the Acts to regulate commerce, air carriers and foreign air carriers subject to part A of subtitle VII of title 49, and persons, partnerships, or corporations insofar as they are subject to the Packers and Stockyards Act, 1921, as amended [7 U.S.C. 181 et seq.], except as provided in section 406(b) of said Act [7 U.S.C. 227(b)], from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.

(3) This subsection shall not apply to unfair methods of competition involving commerce with foreign nations (other than import commerce) unless—

(A) such methods of competition have a direct, substantial, and reasonably foreseeable effect—

(i) on commerce which is not commerce with foreign nations, or on import commerce with foreign nations; or

(ii) on export commerce with foreign nations, of a person engaged in such commerce in the United States; and

[Jerry Callo 8720]

Yep.  It's right there in the Packers and Stockyards Act, 1921.  Non-competes are wedged in between "live poultry dealer" and "swine contractor."

[TwiceHorn 31529]

Well, I found the opinion.  The issue isn't so much the statutory authority to regulate competition (that exists), but the statutory authority to make substantive rules, as opposed to bringing administrative and judicial actions for enforcement of statutory laws (congress-enacted).

According to the opinion, of which I am still skeptical, the FTC admitted, not legally and not in binding way, that it didn't have such rulemaking authority until 1978.

I'm not sure I believe that, as I know they have issued rules or guidelines concerning antitrust aspects of IP https://www.ftc.gov/system/files/documents/public_statements/1049793/ip_guidelines_2017.pdf

But maybe those aren't substantive rules.  And they are issued with the DOJ.

Edited August 27 by TwiceHorn