FOLLOW US

Sun

August 23, 2026

America June 4, 2024 6 mins read

FTC Gains Support Against Challenge to New Rule Banning Noncompete Clauses

America ı By Rochdi Rais

0 Comments

FTC Gains Support Against Challenge to New Rule Banning Noncompete Clauses

The Federal Trade Commission has received backing against a challenge of its new rule banning noncompete clauses, with a labor group, local lawmakers and others urging a Texas federal court not to prevent the rule from taking effect in September.

Supporters of the rule filed several amicus briefs Friday pushing back against a bid to stay the effective date and a bid for a preliminary injunction to prevent the rule's enforcement lodged by tax preparation company Ryan LLC and the U.S. Chamber of Commerce.

The Texas AFL-CIO, a state labor federation with 240,000 affiliated members, argued in its brief that the union group supports a speedy implementation of the rule because of the damaging effects that noncompete provisions have on Texas workers and because noncompetes undermine "the fundamental right to pursue a vocation of one's choosing."

"Working people rarely, if ever, have an opportunity to negotiate over the non-compete provisions in their employment contracts," the Texas AFL-CIO said Friday. "But these provisions strip them of the right to seek work where they would receive higher pay and better treatment and impede their professional growth and ability to channel their entrepreneurial spirit for the benefit of all of us."

By limiting economic freedom, the union group added, "non-competes leave hard-working Americans at the mercy of abusive employers, low wages, and poor working conditions."

An attorney for the Texas AFL-CIO, Nina DiSalvo of Towards Justice, told Law360 on Monday that powerful corporations should not be allowed to trample basic freedoms or to sidestep "a free and fair labor market."

"The Texas AFL-CIO brings ordinary people's voices to a complex litigation and reminds us that the issues at play here are actually very simple: the freedom of working people to pursue their careers, serve their clients, and start new businesses," DiSalvo said.

A group of 12 current and former local elected officials from Texas said in a brief on Friday that the FTC's "extensive analysis" shows that noncompete clauses undermine small-business creation, innovation, healthcare and wages.

"They do so despite less socially harmful means of protecting employers' legitimate interests, such as nondisclosure agreements and trade-secret protections," the group said. "The FTC's decision to adopt its rule was far from arbitrary or capricious — rather, it was a sensible response to a widespread practice."

An attorney for the elected officials, Darren P. Nicholson of Burns Charest LLP, told Law360 on Monday that the widespread misuse of noncompete agreements is bad for business, workers and for Texas.

"The FTC's rule banning the practice levels the playing field for employees and employers alike, and opens the door for thousands of small businesses," Nicholson said. "This rule makes the Texas economy stronger, and we were glad to partner with Public Rights Project and local officials across the state to urge the court to uphold it."

The FTC voted 3-2 along party lines to implement the new rule on April 23, deeming the use of noncompete clauses in employment contracts an unfair method of competition and thus unenforceable. Set to take effect in September, the rule bars noncompetes moving forward, and requires employers to tell current and former employees that existing agreements are no longer enforceable.

It includes a carveout for existing noncompetes covering senior executives, but the use of the clauses for those employees will be banned going forward.

Ryan LLC was the first to file a challenge of the rule, in the Northern District of Texas, the same day as the FTC's vote. The U.S. Chamber of Commerce intervened in the case last month after a court paused the Chamber's similar case and urged it to join Ryan's suit, because it was filed a day earlier.

FTC Noncompete Clauses

Nearly a dozen national and international trade associations threw their support behind the challenge in a joint amicus brief last month, as several other groups also filed individual briefs supporting the bid for a stay and a preliminary injunction.

The suit contends the FTC needs express congressional approval to regulate FTC noncompete clauses and cannot rely on its general authority against unfair methods of competition. The suit also argues that the retroactive effect raises constitutional concerns and that a categorical ban reflects an "arbitrary and capricious" exercise of the agency's powers since noncompetes need to be analyzed individually to see if they're unfair.

A group of administrative law scholars pushed back against the claims in an amicus brief on Friday, saying the FTC has a clear congressional mandate to promulgate unfair competition rules and said the "major questions doctrine" applies when there's a "mismatch" between an agency's action and its assigned mission.

"No such mismatch plausibly exists here: Congress has vested the commission with broad powers over unfair methods of competition, and no government agency could reasonably be expected to have greater expertise than the commission concerning non-compete agreements or unfair methods of competition generally," the scholars said.

An attorney for the scholars, Mark Samburg, senior counsel for the Democracy Forward Foundation, said in a statement on Monday that the "extremists" behind the rule challenge make a series of arguments that are fundamentally flawed and said the scholar's brief shows how "outlandish those challenges to this important protection for workers are."

"Non-compete clauses have kept millions of people trapped in jobs they may not want, and Democracy Forward is committed to defending workers' hard-fought freedoms," Samburg said.

A representative for the FTC declined to comment Monday. Representatives for Ryan and the Chamber did not respond to requests for comment.

The former and current elected officials are represented by Darren P. Nicholson, Warren T. Burns and Kyle Oxford of Burns Charest LLP, and Joshua A. Rosenthal and Eushrah Hossain of the Public Rights Project.

The administrative law scholars are represented by Mark Samburg and Robin F. Thurston of the Democracy Forward Foundation.

The Texas AFL-CIO is represented by David H. Seligman, Nina DiSalvo and Rachel W. Dempsey of Towards Justice, and Ashley E. Tremain of Tremain Artaza PLLC.

Ryan LLC is represented by Allyson N. Ho, Elizabeth A. Kiernan, Eugene Scalia, Amir C. Tayrani, Andrew G.I. Kilberg, Aaron Hauptman and Joshua R. Zuckerman of Gibson Dunn & Crutcher LLP, and Charles W. Fillmore and H. Dustin Fillmore III of The Fillmore Law Firm LLP.

The U.S. Chamber of Commerce, Business Roundtable, Texas Association of Business and Longview Chamber of Commerce are represented by Jordan L. Von Bokern and Tyler S. Badgley of the U.S. Chamber Litigation Center, Liz Dougherty of Business Roundtable, Jeffrey B. Wall and Judson O. Littleton of Sullivan & Cromwell LLP, and Robert L. Sayles and Boyce Holleman of Bradley Arant Boult Cummings LLP.

The FTC is represented by Madeline M. McMahon, Taisa Goodnature, Rachael Westmoreland and Arjun Mody of the U.S. Department of Justice's Civil Division.

The case is Ryan LLC et al. v. Federal Trade Commission, case number 3:24-cv-00986, in the U.S. District Court for the Northern District of Texas.

Previous Article

Colorado Supreme Court Sets High Bar for Forcing Prosecutor Testimony

Read More
2770 Posts

Rochdi Rais

Rochdi Rais is the Head of Growth and financial and legal writer at USA Herald. He has been writing and editing financial, legal and U.S. news for years with over +4000 articles published during his career.

Discussion

No comments yet. Be the first to join the discussion!

Don’t Miss It
America August 21, 2026
Publix Blueberry Recall Escalates to FDA’s Highest Danger Rating
By – Rihem Akkouche
Breaking News August 21, 2026
Tyler Duckworth, ‘The Challenge’ Champion, Dies…

 The two-time MTV winner had been in front of an…

By – Ramzi Salem
High Profile Court Cases August 21, 2026
Alex Jones’ $45M Punitive Award Cut…

AUSTIN, Texas — The Texas Third Court of Appeals cut…

By – Michallie Harrison
High Profile Court Cases August 21, 2026
Pawleys Island School Closes After Sex-Offender…

PAWLEYS ISLAND, S.C. — Pawleys Island Christian Academy has closed…

By – Michallie Harrison
America August 21, 2026
Eric Swalwell Faces FBI Search as…

WASHINGTON — Former congressman Eric Swalwell is facing an escalation…

By – Jackie Allen
High Profile Court Cases August 20, 2026
Austin Metcalf’s Racist History Kept From…

MCKINNEY, Texas — Jurors who rejected Karmelo Anthony’s self-defense claim…

By – Michallie Harrison
America August 20, 2026
Ilja Dragunov Departs From WWE, Closing…

A wrestler once billed as “the Mad Dragon” has slipped…

By – Rihem Akkouche
America August 20, 2026
Ilja Dragunov Departs From WWE, Closing…

A wrestler once billed as “the Mad Dragon” has slipped…

By – Rihem Akkouche
America August 20, 2026
Comcast $117.5M Settlement Clears Final Hurdle…

A data breach that touched more than 31 million lives…

By – Rihem Akkouche
America August 20, 2026
Mitsubishi Electric to Acquire PCI Energy…

Mitsubishi Electric Corp. just planted a much bigger flag in…

By – Rihem Akkouche
America August 20, 2026
ISIS New York Capitol Attack Plot…

A plan authorities describe as both deliberate and deeply dangerous…

By – Rihem Akkouche
America August 20, 2026
KKR’s $9B UGI Bid Headlines a…

Wall Street’s rumor mill never really sleeps, but this week…

By – Rihem Akkouche
America August 20, 2026
Slayer’s Law Blocks Nick Reiner From…

The Slayer’s Law more commonly called a “slayer statute,” has…

By – Jackie Allen
America August 20, 2026
Slayer’s Law Blocks Nick Reiner From…

The Slayer’s Law more commonly called a “slayer statute,” has…

By – Jackie Allen
America August 20, 2026
Bitcoin Twins See Bitcoin’s $65,000 Level…

The Bitcoin Twins, Cameron and Tyler Winklevoss, are once again…

By – Jackie Allen
America August 19, 2026
Hayden Panettiere Death Investigation Heats Up…

 Police Seek Answers in Panettiere’s Final Hours A Death Investigation…

By – Jackie Allen
America August 18, 2026
Hayden Panettiere Remembered for her Acting…

Hayden Panettiere, the former child star who became internationally known…

By – Jackie Allen
America August 18, 2026
Penn State Cocaine Ring Used Pledges,…

HARRISBURG, Pa. — Fourteen people face charges in an alleged…

By – Michallie Harrison
America August 18, 2026
Homewrecker Lawsuit Puts North Carolina’s Rare…

Former Sen. Kyrsten Sinema is at the center of a…

By – Jackie Allen
America August 20, 2026
Robin Williams’ Children Reactivate His Instagram…

Inside This Report Zak, Zelda, and Cody Williams have relaunched…

By – Samuel Lopez
America August 19, 2026
Christian Metal Band Demon Hunter Declares…

INSIDE THIS REPORT Christian metal band Demon Hunter has sued…

By – Samuel Lopez
America August 19, 2026
Judge Removed After Saying Jury “Got…

INSIDE THIS REPORT A visiting judge removed Judge John Roach…

By – Samuel Lopez
America August 19, 2026
Did the Government Just Admit It…

INSIDE THIS REPORT Avi Loeb says government sources asked him…

By – Samuel Lopez
America August 19, 2026
Eight Years After Elon Musk Shot…

Key Takeaways Elon Musk’s Tesla Roadster has been traveling through…

By – Samuel Lopez
America August 19, 2026
A Near-Total “Blood Moon” Will Light…

Key Facts A deep partial lunar eclipse will be visible…

By – Samuel Lopez
America August 16, 2026
Perez Hilton’s Mother Seeks Temporary Custody…

By Samuel López | USA Herald Perez Hilton’s family has…

By – Samuel Lopez
America August 13, 2026
Taylor Farms Jalapeño Recall Salmonella Scare…

A single shipment of peppers has set off a chain…

By – Rihem Akkouche
America August 12, 2026
Heat Dome Brings Dangerous Temperatures Across…

A powerful Heat dome is expanding across the United States,…

By – Jackie Allen
America August 8, 2026
Joe Biden: Hunter Says the Prostate…

Former President Joe Biden is experiencing a worsening battle with…

By – Jackie Allen
America August 1, 2026
Stormed the Border: Spain Says 25,000…

CEUTA, Spain (AP) — Spanish authorities say thousands of migrants…

By – Jackie Allen
Breaking News July 29, 2026
Trump Ends Medicare Part D Subsidy,…

The Trump administration is ending a Medicare Part D subsidy…

By – Michallie Harrison
America August 17, 2026
Von Miller Cowboys Contract Brings Future…

Some homecomings happen quietly. This one came with a social…

By – Rihem Akkouche
America August 14, 2026
White House Denies Role in Josh…

LOS ANGELES — The White House is denying any role…

By – Michallie Harrison
America August 13, 2026
Prichard Colon Death: Once-Unbeaten Boxer Dies…

Prichard Colon never threw another punch after that October night…

By – Rihem Akkouche
America August 13, 2026
Tiger Woods and Nike: 27-Year Partnership…

Tiger Woods built one of the most lucrative athlete-brand partnerships…

By – Jackie Allen
America August 12, 2026
209 Triple-Doubles, Two Offers Declined: Russell…

There were two NBA teams ready to hand Russell Westbrook…

By – Rihem Akkouche
America August 11, 2026
Part 2. Archbald Faces Big Expansion…

In Archbald, Pennsylvania, a community of roughly 7,000 residents, the…

By – Jackie Allen

No posts found.

No posts found.

Signup for the USA Herald
exclusive Newsletter