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Trump-Appointed Judge Strikes Down FTC Ban on Noncompete Agreements
"Thirty million workers who were trapped by these agreements will now stay trapped thanks to this ruling," an expert said.
Aug 21, 2024
A U.S. District Court judge in Texas on Tuesday struck down a Federal Trade Commission ban on noncompete agreements that was set to go into effect nationwide in September, drawing condemnation from workers' rights advocates who supported the ban.
Judge Ada Brown, who was appointed to the federal bench by then-President Donald Trump in 2019, ruled that the FTC didn't have the authority to issue substantive rules such as the noncompete ban, which was issued following a 3-2 vote of the agency's commissioners in April.
Noncompetes bar workers from getting jobs with competitors or leaving to start their own company. Commissioners in the majority, including FTC Chair Lina Khan, said the agreements suppress wages, stifle entrepreneurship, and distort labor markets. Advocates have long argued that the agreements are anti-worker.
The FTC has estimated that 30 million U.S. workers are subject to noncompete agreements. Had the rule gone into effect—voiding most existing agreements and prohibiting new ones—workers would have collectively increased their earnings by hundreds of billions of dollars over the next decade, the agency said.
"We are disappointed by Judge Brown's decision and will keep fighting to stop noncompetes that restrict the economic liberty of hardworking Americans, hamper economic growth, limit innovation, and depress wages," Victoria Graham, an FTC spokesperson, toldThe Washington Post.
Bharat Ramamurti, a former deputy director of the National Economic Council who's now a senior adviser at the American Economic Liberties Project (AELP), an anti-monopoly advocacy group, said on social media that "30 million workers who were trapped by these agreements will now stay trapped thanks to this ruling."
30 million workers who were trapped by these agreements will now stay trapped thanks to this ruling. The FTC estimated that banning noncompetes would empower workers and raise wages by nearly $200 billion over the next decade, which is why big business lobbyists fought it. https://t.co/G79l9l5UWs
— Bharat Ramamurti (@BharatRamamurti) August 20, 2024
Ryan LLC, a tax services firm based in Dallas, sued to block the FTC regulation as soon as it was issued in April. The U.S. Chamber of Commerce and the Business Roundtable later joined the case, which is in a jurisdiction friendly to their interests. If the case is appealed, which Graham said the FTC is "seriously considering," it would go to the U.S. Court of Appeals for the 5th Circuit—the most right-wing, pro-business appeals court in the country.
Tuesday's ruling, though momentous, didn't come as a surprise. Judge Brown signaled her intent to side with the plaintiffs last month when she partially blocked the FTC rule and placed a temporary injunction on it.
Similar cases involving the FTC noncompete ban have recently appeared in federal courts in Florida and Pennsylvania, with different and less consequential outcomes, raising the possibility that the matter will be taken up by the U.S. Supreme Court.
The Supreme Court's right-wing majority would make a ruling favorable to the FTC unlikely, so congressional action could be necessary to institute a ban on noncompete clauses, experts say.
Banning noncompetes is popular among the general public and has some bipartisan support, with a number of prominent Republicans having come out in favor of a ban or narrower reforms, such as prohibiting such agreements for low-wage workers.
Khan, an antitrust leader beloved of progressives, received 21 confirmation votes from Republicans in 2021, and parts of her agenda are supported by the GOP.
Khan is far from universally loved among Democrats. She's recently been the target of Democratic megadonors such as LinkedIn founder Reid Hoffman, who's pushed Vice President Kamala Harris, the Democratic presidential nominee, to sack Khan if elected. However, even Hoffman has indicated support for the noncompete ban.
HuffPost reporter Daniel Marans on Saturday wrote that the noncompete ban was "Khan's most ambitious initiative" and cited expert opinion that even if the rule didn't hold up, it was part of a broader push that could ultimately lead to reform.
"Even if the FTC rule is overturned, there are still many other efforts afoot to undermine the use of these agreements," Lee Hepner, senior legal counsel at AELP, told Marans. "It's a multi-pronged strategy."
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Trump-Appointed Judge Halts Biden Rule Capping Credit Card Fees
"The U.S. Chamber got its way for now—ensuring families get price-gouged a little longer with credit card late fees as high as $41," one advocate said of the ruling.
May 12, 2024
A Trump-appointed judge on Friday delivered a win for big banks when he granted the U.S. Chamber of Commerce a temporary injunction halting a Biden administration rule that would cap credit card fees at $8.
The Consumer Financial Protection Bureau (CFPB) rule, which would have gone into effect May 14, could save U.S. consumers more than $10 billion each year. The decision to pause its implementation, issued by U.S. District of the Northern District of Texas Judge Mark Pittman, will cost ordinary Americans around $27 million each day it is in effect.
"In their latest in a stack of lawsuits designed to pad record corporate profits at the expense of everyone else, the U.S. Chamber got its way for now—ensuring families get price-gouged a little longer with credit card late fees as high as $41," Liz Zelnick, the director of the Economic Security and Corporate Power Program at Accountable.US, said in a statement.
"It's time the U.S. Chamber stops clogging the courts with baseless lawsuits designed to enrich corporate CEOs on the backs of working families—and it's time the judiciary stops legitimizing venue shopping from big industry."
The CFPB issued the rule on March 5 as part of the Biden administration's commitment to crack down on "junk fees." However, the Chamber of Commerce and other banking trade associations—including the American Bankers Association and the Consumer Bankers Association—quickly sued to block it. The executives of Bank of America, Capital One, Citibank, and JPMorgan Chase sit on the boards of the groups behind the suit, according toThe Washington Post.
"Banks make billions in profits charging excessive late fees," Sen. Elizabeth Warren (D-Mass.) wrote on social media Saturday in response to the ruling. "Now a single Trump-appointed judge sided with bank lobbyists to block the Biden administration's new rule capping these junk fees."
Accountable.US also criticized the fact that the suit was before Pittman at all, arguing that the U.S. Chamber of Commerce filed the suit in Texas federal court so that it would end up under the jurisdiction of the 5th Circuit Court of Appeals, which has 19 Republican-appointed justices out of a total of 26. The chamber has filed nearly two-thirds of its lawsuits since 2017 with courts covered by the 5th Circuit.
"The U.S. Chamber and the big banks they represent have corrupted our judicial system by venue shopping in courtrooms of least resistance, going out of their way to avoid having their lawsuit heard by a fair and neutral federal judge," Zelnick said. "It's time the U.S. Chamber stops clogging the courts with baseless lawsuits designed to enrich corporate CEOs on the backs of working families—and it's time the judiciary stops legitimizing venue shopping from big industry."
The 5th Circuit's treatment of the case has also come under fire, as Trump-appointed Judge Don Willett has not recused himself despite the fact that he owns tens of thousands of dollars in Citigroup shares. While Willett has argued that Citigroup is not a party to the case, it belongs to trade groups that are, and any ruling on credit card fees would significantly impact the bank. Collectively, all the judges on the 5th Circuit have invested as much as $745,000 in credit card or credit issuing companies, according to the most recent publicly available information.
Donald Sherman, Gabe Lezra, and Linnaea Honl-Stuenkel of Citizens for Ethics in Washington wrote: "Judge Willett's refusal to recuse, and the lack of transparency about the rationale, reinforces the need for more judicial ethics reform to ensure that everyday Americans and government agencies have a level playing field when they go into court against corporate interests."
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'Scathing Indictment' of Big Oil Lies Unveiled on Eve of Senate Hearing
The report details a "campaign of deception, disinformation, and doublespeak waged using dark money, phony front groups, false economics, and relentless exertion of political influence."
Apr 30, 2024
Two U.S. congressional committees on Tuesday released a report that "provides a rare glimpse into the extensive efforts undertaken by fossil fuel companies to deceive the public and investors about their knowledge of the effects of their products on climate change and to undermine efforts to curb greenhouse gas emissions."
The report—titled Denial, Disinformation, and Doublespeak: Big Oil's Evolving Efforts to Avoid Accountability for Climate Change—was released after nearly three years of investigation by the Democratic staffs of the House Committee on Oversight and Accountability and the Senate Budget Committee.
"For decades, the fossil fuel industry has known about the economic and climate harms of its products but has deceived the American public to keep collecting more than $600 billion each year in subsidies while raking in record-breaking profits," said Senate Budget Committee Chair Sheldon Whitehouse (D-R.I.).
"As this joint report makes clear, the industry's outright denial of climate change has evolved into a green-seeming cover for its ongoing covert operation—a campaign of deception, disinformation, and doublespeak waged using dark money, phony front groups, false economics, and relentless exertion of political influence—to block climate progress," the senator added.
Big Oil’s 4 phases on climate change:
1.Learn of the danger posed by climate change from their own scientists
2.Form an armada of front groups to cover it up
3.Deny a problem exists
4.Engage in doublespeak by pretending to care for a solution
Now we're holding them accountable. pic.twitter.com/YlqztAZgo1
— Senate Budget Committee (@SenateBudget) April 30, 2024
In a statement welcoming the report, Richard Wiles, president of the Center for Climate Integrity, said that "this new evidence of Big Oil's climate lies will likely be used to hold these companies accountable in court—and it should generate renewed calls for the U.S. Department of Justice to finally open its own investigation into the fossil fuel industry."
The congressional probe targeted four companies and two industry allies: BP America, Chevron, ExxonMobil, and Shell USA as well as the American Petroleum Institute (API) and the Chamber of Commerce. As the report details, the committee staffers found:
- Documents demonstrate for the first time that fossil fuel companies internally do not dispute that they have understood since at least the 1960s that burning fossil fuels causes climate change and then worked for decades to undermine public understanding of this fact and to deny the underlying science.
- Big Oil's deception campaign evolved from explicit denial of the basic science underlying climate change to deception, disinformation, and doublespeak.
- The fossil fuel industry relies on trade associations to spread confusing and misleading narratives and to lobby against climate action.
- The fossil fuel industry strategically partners with universities to lend an aura of credibility to its deception campaigns while also silencing opposition voices.
- All six entities—Exxon, Chevron, Shell, BP, API, and the Chamber—obstructed and delayed the committees' investigation.
The report was released on the eve of a Wednesday morning Senate hearing hosted by Whitehouse. The House panel's ranking member, Rep. Jamie Raskin (D-Md.)—who participated in a related October 2021 event in the lower chamber—is expected to join multiple experts in testifying.
"We applaud Sen. Whitehouse, Rep. Raskin, and their committees for helping to shine further light on Big Oil's ongoing climate deception," said Wiles. "Communities across the country are already taking these polluters to court to make them pay for their deceit, and many of their lawsuits have cited documents unearthed by Congress as evidence."
"Big Oil's concerted efforts to mislead the public about their destructive industry are the most consequential corporate fraud in history," he continued. "Tomorrow's hearing should make clear that it's time for the U.S. Justice Department to get off the sidelines and take action to hold Big Oil accountable for lying to the American people for decades."
Wiles was far from alone in demanding action from the Biden administration based on the committees' findings.
"This report is a scathing indictment of the fossil fuel industry's lies and corruption," declared Cassidy DiPaola, a spokesperson for the Make Polluters Pay campaign. "As the impacts of the climate crisis worsen, from deadly heatwaves to devastating floods and wildfires, it's never been more important to hold polluters accountable for the damage they've knowingly caused. The Senate Budget Committee's investigation is a critical step towards justice, and it's time the Biden administration follows suit."
Sunrise Movement executive director Aru Shiney-Ajay urged President Joe Biden—who is seeking reelection in November—to "fight for young people by holding companies like Exxon accountable for their climate lies."
"President Biden must hold Big Oil responsible by declaring a climate emergency and suing fossil fuel companies for creating the climate crisis and lying to the public about it," Shiney-Ajay said. "For too long we've seen fossil fuel companies like Exxon and Chevron deny the cause of the climate crisis and pretend to fight for climate action, all the while lining their pockets with bigger and bigger returns. This must stop and the president can do something about it."
"Biden must direct the Department of Justice to investigate and prosecute fossil fuel companies like Exxon for their disinformation," she argued. "Until the administration starts treating Big Oil like Big Tobacco, everyday Americans will continue to pay for their lies with flooded homes, hotter summers, and more extreme weather."
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