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July 24, 2024
Cadwalader antitrust counsel Bilal Sayyed spoke with the Global Competition Review about a July 23 Pennsylvania district court ruling that the Federal Trade Commission has the authority to write antitrust rules, including its intention to ban noncompete clauses in employment agreements.
In deciding ATS Tree Services, LLC v. FTC, a Pennsylvania federal judge declared that “the ordinary meaning of the statutory text provides the FTC with the authority to promulgate rules prohibiting unfair methods of competition.” The decision is viewed as a notable win for the FTC, which experienced a setback on July 3 when a Texas district court issuing the first judicial challenge to the commission’s noncompete rule.
Bilal, who formerly directed the FTC’s Office of Policy Planning, compared and contrasted the two judges’ approaches to the issue, noting that the Pennsylvania judge took a “textualist” approach to the authority question – a method of analysis that conservative courts are typically more known for. The Texas judge looked more at the legislative history to find the FTC lacked authority, which opens the door to rulings that depart from the text and could confer broader power to an agency.
“I’ve been critical of the FTC spending resources on this, because of the likelihood courts find they do not have authority to promulgate the rule, but I think [the Pennsylvania judge’s] approach is interesting and tries to apply the text as written,” he said.
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