FTC Gets Win on Noncompete Ban After Loss in Another Court (3)

A federal judge rejected a small Pennsylvania company’s challenge of the Federal Trade Commission’s ban on noncompete contracts, creating a divide in the judiciary over the regulator’s powers.

The FTC has clear legal authority to issue “procedural and substantive rules as is necessary to prevent unfair methods of competition,” said Judge Kelley Brisbon Hodge of the US District Court for the Eastern District of Pennsylvania. ATS Tree Services has failed to establish it would eventually succeed on the merits of its argument that the agency lacks such power, she said.

Beyond that, the tree-trimming company, which employs ...