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On Friday afternoon, the Federal Trade Commission notified a federal judge in Texas who had previously entered a nationwide injunction against its sweeping noncompete ban that the agency would appeal her decision to the Fifth Circuit Court of Appeals.
The judge had previously ruled that Congress did not afford the FTC statutory authority to create substantive rules, like one that effectively bans most noncompetes. The court also concluded that the FTC’s rule banning most noncompetes was “arbitrary and capricious” because the FTC sought to adopt a one-size-fits-all approach without sufficiently considering reasonable alternatives. The net result was an overly broad rule that, without explanation, made