US District Judge Ada Brown determined that the FTC lacked authority to ban noncompete agreements, criticizing the agency for relying on "inconsistent and flawed empirical evidence."
FTC Chair Lina M. Khan articulated that "noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism," emphasizing the need for the ban.
Critics, including the two Republican commissioners at the FTC, argued the agency "overstepped the boundaries of its power" in attempting to enforce the noncompete rule.
FTC spokesperson Victoria Graham expressed disappointment over the ruling, stating they would continue to fight against noncompete agreements that hinder economic growth and innovation.
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