The Brief

The Federal Trade Commission is moving to vacate its rule banning noncompete agreements, reversing what was seen as a signature accomplishment of the commission under President Joe Biden.

Noncompetes are employment agreements that prevent workers from taking new jobs with a competing business or starting one of their own, usually within a certain geographic area and timeframe after leaving their job.

The ban, championed by former FTC Chair Lina Khan, was finalized in 2024 but never took effect. Following a lawsuit brought by the Dallas-based tax services firm Ryan LLC, a federal judge in Texas found that the FTC had likely exceeded its authority in issuing the ban and halted it nationwide.

Last fall, the Biden administration appealed that ruling to the 5th Circuit Court of Appeals. But in March, the Trump administration asked the court for a 120-day pause on the appeal. The government's attorneys cited the changeover in administration and comments made by new FTC Chair Andrew Ferguson that the agency should reconsider its defense of the rule.

Then in July, the Trump administration told the court it needed still more time. The court approved another 60-day pause that was to end Sept. 8.

Late Friday afternoon, just ahead of that deadline, the FTC announced it had voted 3-1 to dismiss the appeal and take steps to vacate the rule.

"The Rule's illegality was patently obvious," wrote Ferguson in a joint statement with fellow Republican commissioner Melissa Holyoak. "It preempted the laws of all 50 states and actively displaced hundreds of existing laws across 46 states."

The dissenting vote was cast by Rebecca Kelly Slaughter, whom Trump had tried to fire earlier this year. Now the lone Democrat on the commission, she returned to her seat Wednesday following a ruling from the Court of Appeals for the D.C. Circuit.

30 million people bound by noncompetes

The FTC has estimated that some 30 million people, or 1 in 5 American workers, from minimum wage earners to CEOs, are bound by noncompete agreements.

The agency's rule, narrowly approved by the commission along party lines in April 2024, would have invalidated nearly all existing noncompetes and banned new ones except in rare circumstances. Khan said because workers would be able to freely pursue new opportunities without the fear of being taken to court by their past employers, it could lead to increased wages totaling nearly $300 billion per year and the annual creation of 8,500 new businesses.

From the business community, there was immediate pushback. In its lawsuit, Ryan LLC argued that the noncompete ban would inflict irreparable harm by enabling its employees to leave for the competition, potentially taking with them valuable skills and information gained on the job. The U.S. Chamber of Commerce, which joined Ryan's lawsuit, argued that the rule constituted an unlawful overreach of the FTC's authority and warned it would harm the economy.

Ferguson, one of two Republican commissioners on the FTC at the time, voted against the rule, arguing that the FTC lacked the authority to issue a nationwide prohibition on a centuries-old business practice. In his written dissent, he called the ban "by far the most extraordinary assertion of authority in the Commission's history" and a violation of the Constitution.

Still, since becoming FTC chair under Trump, Ferguson has made clear he's no fan of noncompete agreements.

"Noncompete agreements can be pernicious," he wrote in his statement released Friday. "They can be, and sometimes are, abused to the effect of severely inhibiting workers' ability to make a living."

Earlier this year, Ferguson told Fox Business that one of his top priorities would be, instead of a blanket ban, to send FTC enforcers out looking for noncompetes and no-poach agreements that violate the Sherman Act, the 1890 law prohibiting activities that restrict competition in the marketplace.

On Thursday, the FTC gave an example of the type of enforcement it now plans to pursue. The commission announced it had ordered the country's largest pet cremation business to stop enforcing noncompetes against its nearly 1,800 employees.

While acknowledging that kind of enforcement is important, Slaughter says it's no substitute for a nationwide rule.

"It does nothing to help the person working at the hair salon in Minnesota, or the engineer in Florida, or the fast food worker in Washington," she says. "Those people deserve protection too."

The FTC this week also invited the public to come forward with information to help the commission "better understand the scope, prevalence, and effects of employer noncompete agreements, as well as to gather information to inform possible future enforcement actions," according to a press release.

Slaughter points out that during the rulemaking process, the FTC received 26,000 public comments on noncompetes, almost entirely in support of a nationwide ban.

An architect of the noncompete rule warns the enforcement strategy will fail

Elizabeth Wilkins, Khan's former chief of staff and one of the architects of the FTC's noncompete rule, predicts Ferguson's plan for going after noncompetes using agency enforcers will prove woefully insufficient.

"The FTC has something like 1,400 employees to police the entire economy — not just workers, not just labor markets, but everything," says Wilkins, who is now president and CEO of the left-leaning Roosevelt Institute.

Wilkins notes that even in states that have passed their own laws making noncompete agreements unenforceable, companies are still using them.

"You find them almost as often as you do in states where they are enforceable, which is to say workers don't know their rights," says Wilkins. "A clear and simple ban on noncompetes is, to my mind, the only way to truly protect workers."

A noncompete at a real estate company presents a hard choice

In Grand Junction, Colo., Rebecca Denton signed a noncompete when she took a job as a transaction coordinator with a real estate company in 2019.

Finding herself overworked during the pandemic-era surge in housing sales, she wanted to quit her job, which involved handling all the paperwork for closings. But there was a problem. Because of her noncompete, she knew she wouldn't be able to do similar work in a three-state area for a year.

"You feel trapped," says Denton. "Shackled with a ball and chain."

Denton, who was 52 at the time, weighed her options. She decided on what she considered the lesser of two evils: Rather than remaining in a job that was running her into the ground with 16-hour days, she quit. She took on lower-paying gig work for a year, steering clear of the line of work in which she has expertise. She feels lucky to have had the financial resources to make that choice, a luxury she says many of her friends in real estate don't have.

In 2022, Colorado enacted a law significantly limiting the use of noncompetes. Denton was pleased and says she knows people who were able to leave their jobs as a result. She hopes the law will encourage employers to find other ways to retain workers.

"If you're a good company, and you are paying your employees at scale or better, and you're treating them well, you have nothing to fear of them leaving," Denton says. "You don't need a noncompete because they're going to happily stay right there."

NASA Administrator Jared Isaacman is blaming Boeing and his own agency for botching a test flight of the Starliner spacecraft, designed to take astronauts to and from the International Space Station.

A 311-page report details the issues that led to the failure of Starliner's first crewed test flight, which in June 2024 launched NASA astronauts Butch Willmore and Suni Williams to the International Space Station from Cape Canaveral Space Force station in Florida.

The duo's launch was initially a success — but as their Starliner spacecraft approached the station, multiple thrusters failed, hampering the crew's ability to steer toward the station and dock.

After months of deliberation, NASA and Boeing made the decision to send Starliner back to Earth without Wilmore and Williams on board. Instead, the astronauts remained on the space station and returned home nine months later — in SpaceX's Crew Dragon capsule.

In a news conference Thursday, Isaacman said the report classified the failure as a Type A Mishap — the highest classification for a mission failure. The Space Shuttle Challenger and Columbia accidents, along with the Apollo 1 fire, were also classified as a Type A Mishap. While those accidents resulted in the deaths of crewmembers, the Starliner mission was "ultimately successful in preserving crew safety," according to the report.

The report identifies the thrusters as a key technical issue leading to the failure, although an investigation is still ongoing and a root cause has not yet been found.

"Starliner has design and engineering deficiencies that must be corrected," said Isaacman. "But the most troubling failure revealed by this investigation is not hardware. It's decision making and leadership that, if left unchecked, could create a culture incompatible with human spaceflight."

He said those organizational and leadership problems were seen at both Boeing and NASA, Isaacman's own agency.

The report identified an erosion of trust between the two organizations and leadership that was "overly risk-tolerant."

Isaacman said that the more than 30 launch attempts for this mission led to "cumulative schedule pressure and decision fatigue." When discussing whether to return Wilmore and Williams in Starliner, Isaacman said the "disagreements over crew return options deteriorated into unprofessional conduct while the crew remained on orbit."

Isaacman said there would be "leadership accountability," but didn't offer any details.

"These are very complex programs, and complex programs like this fail in complex ways," said Don Platt, department head of aerospace engineering, physics and space science at the Florida Institute of Technology in Melbourne, Florida. "Those organizational issues are oftentimes, maybe even more important than the technical problems that they're facing."

Such a public scolding of NASA and one of its contractors by its own leader is uncommon, says Platt, who worked on the construction of the space station.

"I think it's really setting the stage for sort of the new way that NASA plans to do business here in his administration," says Platt.

He says that could mean greater transparency and oversight over NASA's contractors

Despite NASA's plans to decommission the space station by the end of the decade, Isaacman says he is still committed to flying Starliner. That would leave NASA with two options, Boeing and SpaceX, to fly astronauts to the station — something SpaceX already does with regularity.

The report offered 61 formal recommendations ahead of the next crewed Starliner mission.

"We're grateful to NASA for its thorough investigation and the opportunity to contribute to it," Boeing said in an emailed statement. "We're working closely with NASA to ensure readiness for future Starliner missions and remain committed to NASA's vision for two commercial crew providers."

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The Long Beach Unified Board of Trustees on Wednesday authorized the school district to end the employment of close to 600 employees, a move the LBUSD says is necessary to stabilize its ballooning deficit.

Board members approved two separate resolutions, the first of which does not renew the contracts of 515 certificated employees, who are on temporary contracts that must be re-upped annually. Though it is common for the district to choose not to renew some temporary contracts, the non-renewal of hundreds of TK-12 teachers, early childhood education teachers and social workers represents a massive change for the next school year from the current workforce of 10,000 total employees. While schools across the district will feel the cuts, Poly and Jordan high schools may be especially hard hit; 14 and 12 teachers at each site are listed on the district’s document of non-renewals.

The second resolution authorized the district to formally lay off 54 classified district positions: non-teaching staff members ranging from office support staff to instructional and recreation aides to library media assistants to parent liaisons.

The board votes come after months of warnings from the district that costs and spending have outpaced the district’s funding, saddling LBUSD with a $70 million deficit. The district is now attempting to shrink that deficit through a fiscal stabilization plan that “has prioritized preserving core instructional, wellness, and student support services,” the district wrote in an agenda item related to the cuts.

Prior to the vote, Superintendent Jill Baker framed the proposed cuts with the historical context of significant enrollment declines, the expiration of funds following the Great Recession and COVID-19 pandemic that had allowed the district to develop a healthy reserve, uncertain federal and state dollars and low attendance numbers, for which the district is penalized — “a really grave situation, fiscally,” she said, one that many districts across California are grappling with.

Baker walked board members through the significant efforts the district has made to manage costs, saving more than $47 million, including through significant central office reductions. Despite these efforts, it’s still not enough, Baker said.

“The release of temporary certificated contracts is one way of reducing the number of employees without impacting permanent certificated employees,” the district wrote in the agenda item.

For those 515 certificated employees who will be notified that their contracts will end, it’s a way that “the district can get away with letting teachers go without calling it a layoff,” said Peder Larsen, vice president of the Teachers Association of Long Beach, which represents certificated employees in LBUSD.

Some of them could be rehired, especially if their positions are in high demand, like science, math and special education teachers, Larsen said. Yet, it throws hundreds into a tailspin of uncertainty and fear, unsure if their jobs have definitively ended and how long they will have health coverage, he added.

While he said the district has not officially announced that no permanent certificated employees will be cut (they have until March 15 to do so), he said he is “reading the tea leaves” and predicting those permanent positions will be safe this year.

In his comment to the board during public testimony, Larsen advocated for examining the money spent annually on consultants and contracts and urged the board and district to re-examine their priorities and “choose to protect the people who serve students every single day.”

On both votes, School Board Member Maria Isabel López was the lone vote against the resolutions, voicing her opinion that some of these positions could have been saved if fiscal priorities had been different and major contracts had not been approved.

Other board members acknowledged that the votes will change lives. “There’s not one of us in this room that takes this lightly,” said Board President Diana Craighead before voting in favor of the cuts. Board Member Doug Otto said he was voting to adopt the resolutions “sadly, reluctantly and necessarily.”