This week, Federal Judge Ada Brown blocked a rule from the Federal Trade Commission that would have banned noncompete agreements, a decision that will prevent the FTC from implementing the ban absent any potential FTC appeal. The ruling dates back to April and was challenged by a coalition of industry groups in the U.S. District Court for the Eastern District of Texas. The lawsuit argued that the rule exceeded the FTC’s authority and sought to ban a practice that has historically been governed by state law.
The American Hotel & Lodging Association and other business groups filed an amicus brief in May in support of the lawsuit. That brief argued that the FTC’s rule ignores the more than 200 years of state jurisdiction over noncompete agreements, upends companies’ contractual relations with their employees and makes it more difficult for companies to protect their business interests.
“The FTC overstepped its authority by approving a rule that allows federal interference in multitudes of business agreements across the country,” AHLA Interim President and CEO Kevin Carey said in a statement after Judge Brown’s ruling. “In doing so, the FTC set a dangerous precedent for intruding into an area that has been regulated by the states throughout our nation’s history. We applaud the judge’s decision and will continue to support efforts to overturn the FTC’s unjustified and overly broad rule.”
As reported in July, U.S. hotels added 700 jobs to their payrolls in June. The Bureau of Labor Statistics reported that total hotel employment stands at about 1.92 million—down more than 196,000 industry workers than in February 2020. BLS also revised down the total number of hotel jobs in the country, which eliminated job gains for the industry that were reported in prior months.