Texas groups join suit to halt rule banning noncompetes

LONGVIEW – The Houston Chronicle reports that business groups, led by a pair of Texas advocacy associations, stepped in quickly Wednesday seeking a halt to a rule issued by the Federal Trade Commission banning employers from using noncompete clauses to keep workers from going to a competitor. The ban was approved Tuesday and is expected to take effect 120 days after it is entered into the Federal Register. It was immediately challenged by U.S. Chamber of Commerce, which was joined by the Texas Association of Business and the Longview (Texas) Chamber of Commerce in filing suit in the U.S. District Court for the Eastern District of Texas to block the measure.

Saying “the burdens of the Noncompete Rule will be immediate and significant,” the organizations argued that “Beyond making virtually all noncompetes illegal going forward, the Noncompete Rule also purports to retroactively invalidate roughly tens of millions of existing agreements. … As a result, businesses that bargained for noncompetes will lose the protections of those agreements — even if they already held up their end of the bargain.” Anticipating a delay in implementation, several Houston labor attorneys were proceeding with business as usual with their noncompete cases. Todd Slobin, a board certified labor and employment partner at Shellist Lazarz Slobin, said he thought the rule was great and it could help the economy in general because people could get better, higher-paying jobs based on their experience and skills. “In one hand, it’s amazing,” Slobin said. “In the other hand, it’s kind of like preparing for a hurricane that may never happen. Because, you know, there’s going to be so many legal challenges from big businesses, industries, who want to enforce these noncompetes and want to have them in place to keep employees where they are.”