Federal judge partially blocks U.S. ban on noncompetes
npr.orgThe question before the Court in this case was whether the FTC has the power to issue substantive rules related to unfair methods of competition. The Court concludes[0] that the FTC does not have that power, and that Section 6(g) of the FTC Act permits the FTC only to issue "housekeeping" rules related to agency organization, procedure, or practice.
That follows from three main statutory and historical clues:
1) Section 6(g) contains no penalty provision—which indicates a lack of substantive force. Other grants of substantive rulemaking specify what happens if regulated entities don't follow the rule.
2) The location of Section 6(g) is suspect. It's the seventh in a list of twelve almost entirely investigative powers, and starts with a grant of organizational power to "from time to time classify corporations". This is hardly where you would expect to find sweeping substantive rulemaking power if Congress had in fact chosen to grant it.
3) The FTC has not historically seen itself as possessing the power to issue substantive rules on unfair methods of competition. Courts are skeptical of agencies discovering latent powers decades later.
Overall, this is exactly what commentators expected to happen. Banning noncompetes may well be good policy, but it's up to the legislature (whether Congress or in individual states) to enact that policy. In addition, nothing in this decision prevents the FTC from using its adjudicatory powers to go after individual examples of noncompetes which it believes are unfair methods of competition.
[0] https://storage.courtlistener.com/recap/gov.uscourts.txnd.38...
Thank you for a thoughtful summary of what really happened. So many people are focused on outcomes that they would destroy the plumbing of government to get where they want to be.
For all the talk of a politicized Supreme Court, I'm not so sure that the net result has been to empower authoritarianism, even if it limits their personal liability to later prosecution. Shutting down Chevron principal empowers the Legislature, it seems to me.
Well, they allowed kings to run the nation, that's scary.
But Chevron is about a different project. It's ambition is to fulfill the Federalist Society fantasy of de-governance.
What comes from that isn't direct authoritarianism by government. It's unchecked corporate greed control & influence, with a government maimed and without ability to respond or act. Making rulemaking & regulation impossible, preventing defense of consumers, is the plan for Federalist Society's unchecked economic totalitarianism.
Maybe perhaps possibly we see a legislature better able to wield and use power, after this redefinition of government. But with the shape of the Senate favoring small states >> 10x big states, it seems unlikely that the will to govern will finally get upper hand over the will to de-govern.
Removing Chevron empowers the judiciary, not the legislature. Major questions doctrine and some of the recent cases around it (student loans) have empowered legislature over executive.
I honestly believe the FTC action was a corporate lobbied event. Why? There were various states where campaigns were ongoing to ban noncompetes. The FTC ruling basically derailed them.
Absolutely could have been, it would take months to get them going again.
If only legislators would legislate!
I predicted this as soon as they announced the ban on noncompetes. If you want this to happen then vote for politicians that have an interest in keeping corporations in check and get a bill passed in Congress. Otherwise, it will just get overturned.
I expected this to be boring but I almost choked on my coffee here
> ....enabling its competitors to poach valuable employees, whose knowledge and training would go out the door.
Thats the funniest thing I read all week.
It is an attempt to erase our culture, way of life, and our honor. We need the means to ensure the preservation of society and protect our race. Southerners must stop apologizing for slavery and reject the idea that it was a necessary evil!
If we stop sending small children into coal mines the economy shall collapse!
> "While this order is preliminary, the Court intends to rule on the ultimate merits of this action on or before August 30, 2024," she wrote.
> In its complaint, Ryan LLC accused the FTC of overstepping its statutory authority in declaring all noncompetes unfair and anticompetitive.
> Judge Brown agreed, writing, "The FTC lacks substantive rulemaking authority with respect to unfair methods of competition."
> Through a statement Wednesday evening, the FTC said its authority is supported by both statute and precedent.
I’m not entirely against this outcome. Things that have big impact or are controversial or are visible enough to warrant public discussion should just be acted on by congressional legislation rather than assumed executive authority.
That said I think noncompetes and similar restrictions on employees are too broad and go too far in practice. They are essentially anti competitive. Still, the main problem for competition is the size and capital of incumbent mega corporations, and not JUST their noncompetes. The FTC needs to do something about that.
IMHO we already have good evidence about the harm to corporations we can expect to see by banning non-competes. California banned them in 1941 and everybody can see how no big business, especially tech businesses, want to be in California.
California’s legislature declared that they were contrary to public policy. It wasn’t an executive or judicial decision nor should it be. In the American system the legislature is the policy making body as well it should be on account of being the most democratic.
Not that I believe this, but it’s always possible there would have been even more economic success, and that the historical success is despite the ban not because of it.
No, I don't think so. Leaving a crappy company and taking one's skills to another that knows what it's doing is how the Valley's thrived. A noncompete would prevent that.
Dumb middle managers drive out the good people in CA. It's as simple as that. If they could prevent the good people from plying their trade elsewhere, there'd be no discipline on them at all.
How much innovation and small business is happening in industries where noncompetes are commonplace and how do salaries look?
did you forget your /s?
Pretty screwed up that a single judge can block an entire agency
It only applies to the plaintiffs in the case.
I don’t like noncompetes but I don’t like unelected officials making economy-wide decisions even more.
Congress can do their job and pass laws. I’m tired of law making delegated to faceless bureaucrats.
> Congress can do their job and pass laws.
They did. They wrote a law that established the FTC and tasked it with regulating these things.
> I’m tired of law making delegated to faceless bureaucrats.
They're not faceless, but a group of nine (well, six) unelected bureaucrats are currently making a whole bunch of law.
>> Congress can do their job and pass laws.
> They did. They wrote a law that established the FTC and tasked it with regulating these things.
What law gave the FTC the authority to regulate employment agreements?
I appreciate the lack of non-competes in California. That being said, it is the responsibility of Congress to either write employment laws or to delegate that authority.
The Federal Trade Commission Act of 1914 states:
> The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, savings and loan institutions described in section 57a(f)(3) of this title, Federal credit unions described in section 57a(f)(4) of this title, common carriers subject to the Acts to regulate commerce, air carriers and foreign air carriers subject to part A of subtitle VII of title 49, and persons, partnerships, or corporations insofar as they are subject to the Packers and Stockyards Act, 1921, as amended [7 U.S.C. 181 et seq.], except as provided in section 406(b) of said Act [7 U.S.C. 227(b)], from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.
It’s not clear to me that a non compete is an “unfair method of competition”. In particular it hurts employees (well, maybe) who are not the competition of a business.
Companies are in competition for workers.
They didn't pay $415M in compensation for funsies. https://www.cnet.com/tech/tech-industry/apple-google-others-...
why? the bureaucrats understand the domain and the context. have you seen the US Congress? this is just a way for the moneyed people and their lackies to gum up the works and make life worse for the majority while siphoning even more money to the moneyed.
You have it exactly opposite - it is only the moneyed and well-connected who can get the regulators to make rules that fit their needs, while the small business has no hope.
> it is only the moneyed and well-connected who can get the regulators to make rules that fit their needs
Wait until you hear about legislators.
At least the legislators are elected and answer directly to voters. You can dither about who donates but voters truly decide the outcome.
Bureaucrats are multiple layers removed, often serve for entire careers, and truly don’t give a shit because the only way they will get fired is if they assault someone. Nothing will happen to them so “keeping busy” is making ever more rules, whether they are needed or helpful (or not).
> At least the legislators are elected and answer directly to voters.
With the corresponding downside of being eminently and legally bribeable. A hundred grand to your PAC goes a long way.
If we stop electing so many far-right, burn-it-all-down, my-opponents-are-my-sworn enemy, conspiracy-prone politicians we might actually get useful legislation and could stop relying on the elderly and untouchable judicial branch.
The current FTC has a terrible track record and all their things are being struck down :(
Managing from below because congress is too worried about looking bad by making a decision.
Can we just dissolve the U.S. District Court for the Northern District of Texas? They continually harm the entire country with their nonsense.
Almost every “crazy” decision you’ve heard about in recent years comes from this one district.
Dupe, posted earlier today:
> Judge Ada Brown of the U.S. District Court for the Northern District of Texas
The shape of everything to come.
I wonder when those in the techworld will hear that little klaxon ringing in their head.
“She is the first African-American woman federal judge nominated by President Donald Trump”
> Brown was unanimously rated well-qualified by the American Bar Association.[23]
If the experts are fine with her, on what basis should we normies be concerned?
Good point. There’s no sign at all in our culture of a complete breakdown of the concept of “experts” whereby everyone with a claim of academic or positional authority uses it in service of partisan wars.
Imagine how disillusioned the general public would be if something like that were to happen.
My experience is that people attack experts incessantly when it conflicts with their politics. (Think: Anti-vaxxers attacking the medical system). In my experience they may raise good points, but those are usually tangential to the matter at hand.
WRT this specific expert group, is there something wrong with them? I haven't heard such but am willing to be educated.
Disillusionment is easy when one accepts sweeping generalities, but much harder when dealing with specifics. Again, only my experience, but "They are all (something)" only lasts until you take a closer look.
> WRT this specific expert group, is there something wrong with them?
With Federalist Society judges?
Oh my sweet summer child.
> American Bar Association
I mentioned them, not the Federalist society.
Literally cannot understand where the reddit style purposeful rereading of my comment came from, but ok.
I'm not misreading your comment. The supposed "experts" within the legal profession are utterly corrupt and can't be trusted. That's my point. It's an insiders club and they all support each other and buy vacation homes and give each other's kids jobs. When principles conflict with in-group elitism and closed ranks the latter always wins.
Just like every other group of supposed "experts" in the professional class these days. That's just how America is run in 2024. It's the problem.
From TFA:
In its complaint, Ryan LLC accused the FTC of overstepping its statutory authority in declaring all noncompetes unfair and anticompetitive.
Judge Brown agreed, writing, "The FTC lacks substantive rulemaking authority with respect to unfair methods of competition."
They're certainly not wasting any time; the bloody corpse of The Chevron Doctrine is still warm.
This is the new reality. Every single decision, rule, finding, regulation, fee / fine, and press release will now be litigated by the courts.
The Roberts Court's campaign for judicial primacy has usurped all the power of the (executive branch's) administrative state.
Because of course federal policy is best determined by life time appointees (beholden to their plantation class patrons) and not the anti-corporate democracy loving common citizenry.
Prove me wrong.
> federal policy is best determined by life time appointees
Prove you wrong? For sure. It's best determined by elected officials. Second best is judges. In last place we have bureaucrats never elected by anyone nor even appointed by someone who was.
FTC commissioners are appointed, and approved by the Senate, just like judges.
The distinction you’re trying to draw doesn’t exist.
> The distinction
does exist. We're just arguing about the metes and bounds of their legislatively-granted authority.
I can't tell you don't agree about SCOTUS but I believe there were over 1,200 comments about that this week and there's no point in adding to it.
IIRC, that thread was about Trump v United States, (IANAL IMHO) pertaining to unitary executive theory.
Whereas I'm whinging about this court's multiple precedent smashing decisions attacking administrative law, (IANAL IMHO) pertaining to the judicial primacy.
Obviously, I do not think POTUS is the law, nor SCOTUS is outside the law. Stately plainly, I'm certain that > 70% of Americans would agree.
On my more practical terms, I can't abide the Robert's Court eschewing any legal theory. It decides cases peice meal. They selectively use Textualism, Originalism, Historicalism, Major Doctrines, Revanchism, or 4chan memes, to reach predetermined outcomes. With no regard for making each decision mesh with all the others. With no effort to provide guidance to the lower courts. Repeatedly contradicting themselves!
Resulting in chaos.
As we've seen with Dobbs (overturning Roe v Wade). And we'll now see with their push-pull wrt executive power (eg, On the one hand, POTUS' administrative state can't do anything, and on the other, POTUS can do anything as an "official act". OMG! Which izzit?! Make up your minds!)
It's one thing for me (or any one) to disagree with their decisions. That's totally normal. (In a civil society.)
It's another thing entirely when no one knows what the law is any more. This is new. This is not normal.
WTF do we even call this? Calvinball?
I don’t necessarily agree with their decisions but I think they are not so inconsistent as you claim. They want the executive to be more limited in power, but the power it does wield to be mostly immune from oversight by the other branches. It’s a “we each stay in our lane” philosophy.
Sarcasm. Sorry for the confusion. For future, I'll add a "/s" suffix when I'm mocking reactionary talking points.
Looks like the FTC is not overstepping its bounds.
https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim...
Congress said unfair competition is outlawed. The FTC can determine what unfair competition means and enforce it.
Surely they cannot define arbitrary actions as “unfair competition”. It must at least have some basis in reality. That’s the whole point of the Loper Bright decision.
Banning non-competes for line cooks is not an "arbitrary action".
How is that different than before? At least now they’ve stopped doing nationwide injunctions, that’s actually a big improvement! (Though maybe you won’t agree when the next president has a policy that you don’t agree with)