D.C. Memo: Loper Bright Earthquake Just Leveled FTC's Non-Compete Rule
D.C. Memo: Loper Bright Earthquake Just Leveled FTC's Non-Compete Rule
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Loper: The earthquake unleashed by the Supreme Court in Loper Bright Enterprises v. Raimondo occurred less than two months ago and one of the first to feel the shock waves was the Federal Trade Commission. In a ruling Tuesday, U.S. Judge Ada E. Brown barred the FTC from enforcing its near-total ban on non-compete clauses in employment agreements that reportedly covered 30 million American workers. Judge Brown held the FTC did not have legislative authority from Congress to ban non-competes as an unfair method of competition. As the Davis Wright Tremaine law firm put it in a client memo, "Relying heavily on the U.S. Supreme Court's recent decision in Loper Bright Enterprises v. Raimondo, Judge Brown found that the Administrative Procedure Act was enacted 'as a check upon administrators whose zeal might otherwise have carried them to excesses not contemplated in legislation creating their offices.'" Loper overturned the Chevron Doctrine, which required federal courts to defer to an agency's reasonable reading of an ambiguous law. Now, courts are required to determine the best reading of the law, with the government winning only if its position tracked the court's. Under Loper's new restrictions, Judge Brown said: "The role of an administrative agency is to do as told by Congress, not to do what the agency thinks it should do." ACA Connects, a trade group for small ISPs, said "the FTC’s sweeping ban would make it more difficult for small and mid-sized providers to invest in building a specialized workforce required in the broadband industry.”
