Texas judge blocks FTC rule banning noncompete agreements

A federal judge in Texas on Tuesday blocked a Federal Trade Commission rule that would ban employers from forcing workers to sign noncompete agreements.

The rule was slated to go into effect on Sept. 4, but U.S. District Judge Ada Brown held that the FTC lacks the authority to ban the practice of employers precluding employees from doing business with other businesses and companies. Brown ruled that the agency “exceeded its statutory authority” in making the rule, which she called “arbitrary and capricious,” according to a 27-page decision.