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Federal judge in Texas overturns FTC ban on noncompete agreements
A federal judge in Texas has blocked a new rule from the Federal Trade Commission that would have made it easier for employees to quit a job and work for a competitor.
In a ruling Tuesday, U.S. District Judge Ada Brown granted a motion for summary judgement filed by the U.S. Chamber of Commerce and other plaintiffs, and rejected the FTC’s own petition for a judgement in its favor.
In reaching his decision to overturn the ban, Brown concluded that that the FTC “exceeded its statutory authority” in making the rule, which the judge called “arbitrary and capricious.” The judge also concluded that the rule would cause irreparable harm.
As a result of the court’s decision, the FTC won’t be able to enforce its rule, which was set to go into effect on September 4, according to the judge’s ruling.
Still, the decision does not prevent the agency from addressing noncompete agreements through “case-by-case” enforcement actions, said Victoria Graham, an FTC spokesperson.
The FTC is also considering appealing the court’s decision, Graham said.
The FTC in April had voted along party lines to approve a nationwide ban, which would have prohibited noncompetes for all workers.
The consumer protection agency had heard from thousands of people who said they had been harmed by noncompetes, illustrating how the agreements are “robbing people of their economic liberty,” FTC Chair Lina Khan said at the time.
But companies opposing the ban argue they need noncompete agreements to protect business relationships, trade secrets and investments they make to train or recruit employees. At the time of the vote, two Republicans said the agency lacked the jurisdiction to enact the rule, arguing that such moves should be made in Congress.
Apart from the Texas case, companies have also sued the FTC in Florida and Pennsylvania to block the rule.
In the Florida lawsuit, which was brought by a retirement community, the court granted a preliminary injunction, prohibiting enforcement of the rule just for the plaintiff, but not any other company.
In the Pennsylvania lawsuit, the court concluded that the plaintiff, a tree company, failed to show it would be irreparably harmed by the ban and that the company wasn’t likely to win the case.
The divergent rulings mean the issue could end up working its way to the U.S. Supreme Court.
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Paul Whelan, freed in prisoner swap with Russia, tells other American detainees: “We’re coming for you”
Washington — Nearly seven weeks after the Russians handed over Paul Whelan on a tarmac in Ankara, Turkey, the Marine veteran stood on the steps of the U.S. Capitol with a message for other Americans who are held abroad.
“We’re coming for you,” he told reporters Tuesday night after he met with lawmakers. “It might take time, but we’re coming.”
Whelan said he spoke with lawmakers about how the government can better support detainees after they’re released.
“We spoke about how the next person’s experience could be better,” he said. “What the government could do for the next person that’s held hostage and comes home — the care and support that other people might need, especially people that are in a worse situation. There are people coming back that lived in the dirt without shoes for three years, people that were locked up in hideous conditions for 20 years. They need support.”
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The U.S. secured Whelan’s release in August in one of the largest prisoner swaps since the end of the Cold War. The complex deal came after months of sensitive negotiations between the U.S., Russia, Germany, Slovenia, Poland and Norway.
As part of the deal, Russia released 16 prisoners while the Western countries released eight Russians. Whelan was released alongside Wall Street Journal reporter Evan Gershkovich, Russian-American radio journalist Alsu Kurmasheva and Vladimir Kara-Murza, a U.S. green card holder and Kremlin critic.
Whelan, who had been the longest-held American detainee in Russia, was arrested in December 2018 when he traveled to the country to attend a friend’s wedding. He was convicted of espionage in a secret trial and sentenced to 16 years in prison in 2020.
Whelan, his family and the U.S. government vehemently denied that he was a spy and accused Russia of using him as a political pawn. The U.S. government considered him to be wrongfully detained, a rare designation that put more government resources toward securing his release.
But a deal to secure his freedom was long elusive. He remained behind bars as Russia freed Marine veteran Trevor Reed and women’s basketball star Brittney Griner — both of whom were detained after Whelan’s arrest — in prisoner swaps with the U.S.
The U.S. said it pushed for his inclusion in both exchanges, but Russia refused. It led to Whelan advocating for his own release from a remote prison camp, calling government officials and journalists to make sure that he wasn’t forgotten.
When the plane carrying Whelan, Gershkovish and Kurmasheva landed in Maryland on Aug. 1, Whelan was the first to disembark. He was greeted by President Biden, who gave Whelan his American flag pin, and Vice President Kamala Harris.
“Whether he likes it or not, he changed the world,” Rep. Haley Stevens, a Michigan Democrat, told reporters Tuesday.
Whelan’s case and his family’s constant pressure on the U.S. government brought more attention to the cases of Americans who are wrongfully detained by foreign governments.
Haley said Whelan is a reminder to other Americans considering traveling to Russia that “you have a target on your back.”
Whelan said it’s been an adjustment acclimating to life back in the U.S., especially learning the latest technology like his iPhone 15.
“I was in a really remote part of Russia,” he said. “We really didn’t have much. The conditions were poor. The Russians said the poor conditions were part of the punishment. And coming back to see this sort of thing now is a bit of a shock, but it’s a good shock.”