A federal judge in Philadelphia on Tuesday rejected a bid by a tree-trimming company to block a Federal Trade Commission rule from taking effect that would ban agreements commonly signed by workers not to join their employers’ rivals or launch competing businesses.
US District Judge Kelley Hodge in Philadelphia said in a written decision that the FTC, which enforces federal antitrust laws, has the power to ban practices that it deems anticompetitive, including the use of so-called noncompete agreements that curb competition for labor.
Hodge, an appointee of President Biden, denied a bid by ATS Tree Services to block the rule pending the outcome of its lawsuit.
About 30 million people, or 20% of US workers, have signed noncompetes, according to the FTC.
A federal judge in Texas earlier this month blocked the FTC from enforcing the rule against a coalition of business groups including the US Chamber of Commerce, the country’s largest business lobby, and tax service firm Ryan, while they pursue legal challenges.
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