Great Lakes Wire

Michigan Attorney General Dana Nessel commended Judge Kelley Hodge of the U.S. District Court for the Eastern District of Pennsylvania for rejecting a challenge to block the Federal Trade Commission’s (FTC) ban on noncompete agreements. Nessel, who previously joined a multistate coalition supporting the FTC rule, praised the decision in April to implement a nationwide ban on noncompete agreements.

Although Michigan antitrust law currently allows limited noncompete agreements under certain conditions, the FTC’s final rule, once effective, would apply across the entire country. State Representative Denise Mentzer introduced House Bill 4399, aimed at protecting Michigan workers in what are legally referred to as “low-wage jobs,” including positions in the fast-food industry, janitorial services, and gig-economy delivery businesses from being forced to sign noncompete agreements.

“While this ruling is a significant victory for workers in Michigan and across the nation, I have no doubt that entities will continue to challenge the FTC’s rule in an effort to undermine worker protections,” Nessel said. “To truly promote competition and protect worker’s rights, legislation is essential. I commend Representative Mentzer for her leadership in standing with working Michiganders against those who exploit unfair noncompete agreements and intend to fully support her bill when it is taken up in committee.”

Several business groups have filed lawsuits to block the FTC’s final rule before it takes effect. Earlier this month, in a separate case, Judge Ada Brown of the U.S. District Court for the Northern District of Texas blocked the FTC from enforcing the rule against the plaintiffs in Ryan LLC v. FTC. The U.S. District Court for the Northern District of Texas announced it would issue a final ruling on the challenge by Aug. 30th. The FTC rule banning noncompete agreements is set to take effect Sept. 4th.

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