The Federal Trade Commission's ban on non-competes has been struck down by a federal judge in Texas on grounds that the agency does not have the ...
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| | Top News  Getty Images The Federal Trade Commission's ban on non-competes has been struck down by a federal judge in Texas on grounds that the agency does not have the authority to issue such broad-based rules. Independent contractors and employees, whether paid or unpaid, were included under the ban, which also required employers to rescind existing non-competes and actively inform workers that they were no longer in effect. About 30M Americans are currently tied to non-competes, according to the FTC, representing 20% of the U.S. workforce.
Quote: "The commission's lack of evidence as to why they chose to impose such a sweeping prohibition... instead of targeting specific, harmful non-competes, renders the rule arbitrary and capricious," U.S. District Judge Ada Brown wrote in the ruling. "The role of an administrative agency is to do as told by Congress, not to do what the agency thinks it should do. The FTC exceeded its statutory authority and the rule would cause irreparable harm."
Invalidating and banning the disclosures deeply divided many inside the business community. Led by the Chamber of Commerce, there were arguments that the agreements protect trade secrets and relationships, as well as investments needed to train or recruit employees. On the other side, claims were made that non-competes prevent workers from freely switching jobs, can deprive them of higher wages or better working conditions, and could constrict the talent pool for businesses that are looking to expand.
What's next? There had been some other attempts to invalidate the non-compete ban in Florida and Pennsylvania, but the latest court decision will "set aside" the ruling nationwide and bar it from "taking effect on September 4, 2024, or thereafter." The FTC may take a new route by addressing non-compete agreements through "case-by-case" enforcement actions, but it could also consider appealing Judge Ada Brown's decision. However, if lower courts remain split, the matter could be sent up the legal system, with the case eventually reaching the Supreme Court. | | Featured  Want to get more from investing efforts? Take our world-class Premium service for a test drive. Sign up now, and you can try all of Premium's powerful tools and resources: - Our proprietary Quant ratings, plus ratings from Wall St. and analysts on Seeking Alpha
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Past performance is no guarantee of future results. Any content and tools on the platform are offered for information purposes only. Seeking Alpha does not take account of your objectives or financial situation and does not offer any personalized investment advice. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. | | Consumer Walmart (WMT) has fully exited its near 10% holding in JD.com (JD), sending the Chinese e-commerce firm's shares down 7% premarket on Wednesday. The stake, worth billions of dollars and offloaded in one go, may add to the Chinese tech slump and create new dynamics in the foreign market. "This decision allows us to focus on our strong China operations for Walmart China and Sam's Club, and deploy capital towards other priorities," Walmart said in a statement. Meanwhile, JD conducted a $390M stock buyback, fully utilizing the amount authorized under its $3B repurchase program. (5 comments)
| | Automotive Alphabet's (GOOG, GOOGL) autonomous vehicle unit Waymo has surpassed 100,000 trips per week, doubling the volume reported in May. Waymo's product chief Saswat Panigrahi said the company hit the target by scaling deliberately, optimizing costs, and delivering a strong consumer experience. The milestone arrives less than two months before Tesla (TSLA) is scheduled to hold its robotaxi event. The company is one of the most vocal in the industry, and has expressed ambitions about creating a fleet that allows drivers to rent out their personal vehicles. (130 comments) | | Economy Job growth in the U.S. for the 12 months ending March is expected to have been much weaker than estimated. Some fear the preliminary benchmark revision, which will be published by the Bureau of Labor Statistics this morning, may even be as large as a million, which would translate into over 80K payrolls per month. It could also spur calls for deeper interest rate cuts amid concerns that the Fed may have waited too long to start its easing cycle, putting another spotlight on Jerome Powell's Jackson Hole speech on Friday. ( 8 comments) | | Today's Markets In Asia, Japan -0.3%. Hong Kong -0.7%. China -0.4%. India +0.1%.
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