Texas federal judge partially blocks FTC ban on noncompetes

In Texas, a federal judge has issued a ruling that partially blocks the Federal Trade Commission’s (FTC) sweeping ban on noncompete agreements in employment contracts. The judge contends that the FTC does not have the authority to implement such a ban.

Wealth! anchor Brad Smith breaks down the details.

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This post was written by Angel Smith

Video Transcript

A federal judge in Texas blocking a part of the federal trade commission’s ban on non compete agreements for employment set to take effect in the fall.

Now, the judge saying the FTC lacks authority to make the sweeping rule, but the injunction is limited, it only bars the commission from enforcing the ban and to refresh your memory on these rules.

It essentially says that non competes are an unfair method of competition but existing non competes for senior executives can remain enforced.

But for non senior executives, those non competes not enforceable, unenforceable and a lot of workers are impacted here, an estimated 30 million workers are subject to non compete agreements according to the F C and for workers getting out of them could be tricky and expensive if a contract is challenged.

For instance, employees will have to pay all legal fees.

So how can you protect yourself when you’re asked to sign a non compete first read the contract?

If you can have an attorney review it even and don’t take it at face value, you can try to negotiate some of the terms as well.

The Texas judge says that she intends to rule on the merits by the end of August, which might affect the rules nationwide until then, non compete employees are still bound by the rules of their contract.

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