Summary
The Federal Trade Commission (FTC) is stopping its efforts to ban noncompete agreements after a federal judge ruled it exceeded its authority. The decision, supported by the Trump administration, reverses an initiative started under President Biden. Noncompete agreements restrict employees from working for competitors or starting similar businesses.
Key Facts
- The FTC is abandoning a rule that banned noncompete agreements.
- Noncompetes prevent workers from joining competing companies after leaving a job.
- A federal judge in Texas halted the ban, saying the FTC likely overstepped its powers.
- The Biden administration appealed the decision, but the Trump administration paused and later dismissed the appeal.
- Approximately 30 million U.S. workers, about 1 in 5, are subject to noncompete agreements.
- The FTC's previous ban aimed to remove most existing noncompetes and limit new ones.
- Business groups opposed the ban, arguing it would harm the economy and represent an overreach of the FTC's authority.
