A federal decide in Texas has blocked a brand new rule from the Federal Commerce Fee that may have made it simpler for workers to stop a job and work for a competitor.

In a ruling Tuesday, U.S. District Choose Ada Brown granted a movement for abstract judgement filed by the U.S. Chamber of Commerce and different plaintiffs, and rejected the FTC’s personal petition for a judgement in its favor.

In reaching his resolution to overturn the ban, Brown concluded that that the FTC “exceeded its statutory authority” in making the rule, which the decide referred to as “arbitrary and capricious.” The decide additionally concluded that the rule would trigger irreparable hurt.

Because of the court docket’s resolution, the FTC will not have the ability to implement its rule, which was set to enter impact on September 4, based on the decide’s ruling.

Nonetheless, the choice doesn’t stop the company from addressing noncompete agreements by “case-by-case” enforcement actions, mentioned Victoria Graham, an FTC spokesperson.

The FTC can be contemplating interesting the court docket’s resolution, Graham mentioned.

The FTC in April had voted alongside celebration traces to approve a nationwide ban, which might have prohibited noncompetes for all staff. 

The buyer safety company had heard from 1000’s of people that mentioned they’d been harmed by noncompetes, illustrating how the agreements are “robbing folks of their financial liberty,” FTC Chair Lina Khan mentioned on the time. 

However corporations opposing the ban argue they want noncompete agreements to guard enterprise relationships, commerce secrets and techniques and investments they make to coach or recruit staff. On the time of the vote, two Republicans mentioned the company lacked the jurisdiction to enact the rule, arguing that such strikes must be made in Congress. 

Aside from the Texas case, corporations have additionally sued the FTC in Florida and Pennsylvania to dam the rule.

Within the Florida lawsuit, which was introduced by a retirement group, the court docket granted a preliminary injunction, prohibiting enforcement of the rule only for the plaintiff, however not another firm.

Within the Pennsylvania lawsuit, the court docket concluded that the plaintiff, a tree firm, failed to indicate it will be irreparably harmed by the ban and that the corporate wasn’t more likely to win the case.

The divergent rulings imply the difficulty might find yourself working its technique to the U.S. Supreme Court docket.