DALLAS — A significant April ruling from the Federal Trade Commission, Chaired by Lina Khan, that could bring disruption to radio and television stations that hasn’t been experienced in generations has been partially put to a stop in the Lone Star State.
A federal court in Texas, just ahead of the Independence Day holiday, on July 3 placed a block on some of the stipulations spelled out in a FTC decision that places a ban on noncompete agreements.
This rule is scheduled to become law on September 4. Now, with “Chevron deference” struck down by the Supreme Court a day after it ruled that Administrative Law Judges cannot be the final decisive judicial body for a defendant, a full challenge to the Khan-signed rule change could be on the way.
Dallas-based tax services firm Ryan LLC filed its lawsuit just hours after the April 23 ban of the non-compete clause by the FTC. As Khan sees it, this final rule is engineered to “promote competition” and is designed to protect “the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.”
What bearing does the decision from Judge Ada Brown of the U.S. District Court for the Northern District of Texas have? It postpones the effective date of the noncompete ban for the plaintiffs alone. However, it could put the wheels in motion on a bigger effort to undo the FTC decision.
“While this order is preliminary, the Court intends to rule on the ultimate merits of this action on or before August 30, 2024,” Brown wrote. “The FTC lacks substantive rulemaking authority with respect to unfair methods of competition.”
Ryan LLC assailed the FTC for going beyond its statutory authority by ruling that every non-compete agreement was anti-competitive and lacked fairness.
Meanwhile, a Wednesday hearing is set for a similar case involving a small Pennsylvania tree care service.
