During a hearing, U.S. District Judge Timothy Corrigan stated the FTC’s rule faced significant legal issues and questioned the commission's authority to enact such a ban, citing the 'major questions doctrine.' This rule would affect a vast number of noncompete agreements held by around 30 million workers, raising important economic implications that Congress did not explicitly allow the FTC to regulate.
Judge Corrigan emphasized that the rule held 'extraordinary economic and political significance,' pointing to a broader legal principle where significant regulatory actions require clear authorization from Congress.
An FTC spokesperson affirmed that despite the ruling, the noncompete ban is still set to be implemented for most workers by Sept. 4 and expressed the organization's commitment to combating restrictive agreements that harm workers' economic opportunities.
Supporters of the FTC's rule argue that noncompete agreements not only suppress wages and hinder job mobility but also violate antitrust laws by restricting competition for labor, illustrating the ongoing debate between regulatory oversight and economic freedom.
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