A federal judge in Philadelphia on Tuesday rejected a tree-trimming company’s bid to block a Federal Trade Commission rule that bans common agreements that keep workers from joining or starting a rival company of their employer.
In a written decision, U.S. District Judge Kelly Hodge in Philadelphia said the FTC, which enforces federal antitrust laws, has the authority to ban practices it deems anticompetitive, including the use of so-called non-compete agreements that stifle competition for labor.
Hodge, an appointee of President Biden, denied a motion by ATS Tree Services to block the rule pending the outcome of a lawsuit.
According to the FTC, 20 percent of the U.S. workforce — roughly 30 million people — has signed a non-compete clause.
Earlier this month, a federal judge in Texas blocked the FTC from enforcing the rule while a coalition of business groups, including the U.S. Chamber of Commerce, the nation’s largest business lobbying group, and tax services company Ryan, pursues a legal challenge.
