lina khan
Trump Judge Partially Blocks FTC Ban on Anti-Worker Noncompete Clauses
"We will keep fighting to free hardworking Americans from unlawful noncompetes," the agency said in response to the decision.
A Trump-appointed federal judge on Wednesday partially blocked a Federal Trade Commission rule banning most noncompete clauses, ubiquitous anti-worker agreements that prevent employees from moving to or starting their own competing businesses.
Judge Ada Brown of the U.S. District Court for the Northern District of Texas issued a preliminary ruling preventing the ban from taking effect against the handful of plaintiffs that sued the FTC over the rule mere hours after it was finalized in April. The plaintiffs include the tax service firm Ryan LLC and the U.S. Chamber of Commerce, the nation's largest corporate lobbying organization.
Researchers at the Revolving Door Project noted Wednesday that Ryan LLC was "represented by [former President Donald] Trump's Labor Secretary, Eugene Scalia, via BigLaw firm Gibson Dunn."
Watchdogs accused the U.S. Chamber, which celebrated Wednesday's decision, of "judge-shopping," a tactic the organization frequently uses to secure favorable legal outcomes. District courts in Texas fall under the purview of the 5th Circuit Court of Appeals, which is dominated by right-wing extremists.
In her Wednesday decision, Brown did not immediately grant the plaintiffs' request for a nationwide injunction against the ban on noncompetes. But the judge signaled she would likely block the rule in its entirety with her final decision in the case on August 30—just days before the ban's scheduled implementation date.
"The court concludes the commission has exceeded its statutory authority in promulgating the noncompete rule, and thus plaintiffs are likely to succeed on the merits," Brown wrote in her 33-page decision.
"The need for judicial reform in Congress has never been more clear as far-right 5th Circuit territory judges have effectively put up a giant neon sign, 'Corporations, Please Sue Here.'"
A spokesperson for the FTC said in response to the ruling that the agency stands by its "clear authority, supported by statute and precedent, to issue this rule."
"We will keep fighting to free hardworking Americans from unlawful noncompetes, which reduce innovation, inhibit economic growth, trap workers, and undermine Americans' economic liberty," the spokesperson added.
The FTC, led by antitrust trailblazer Lina Khan, estimates that roughly 30 million U.S. workers are bound by noncompete agreements that restrict their ability to switch jobs in pursuit of higher wages and better benefits. The commission believes its ban on noncompetes would result in up to $488 billion in wage increases for U.S. workers collectively over the next decade.
Progressive advocacy groups cast Wednesday's decision as the latest attack on workers—and gift to corporations—by a Trump-appointed judge.
"By halting the noncompetes ban, this court is standing in the way of real gains for workers again," said Emily Peterson-Cassin, director of corporate power at Demand Progress. "With the decision overturning Chevron earlier this week, it's a one-two punch against everyday people."
Tony Carrk, executive director of Accountable.US, said in a statement that "the industry-funded U.S. Chamber continues to cost everyday Americans a ton of money with its suing spree against the Biden administration crackdowns on corporate greed, junk fees, and anti-worker barriers."
"The U.S. Chamber's lawsuit holding up the administration's credit card late fee rule is already costing Americans $27 million a day —and now this latest lawsuit could slam the door shut for millions of American workers to begin pursuing better opportunities," said Carrk. "Noncompete clauses could force employees to endure low wages and poor working conditions as the rule drags through the courts. The big bank and Wall Street CEOs on the U.S. Chamber's board have gotten a huge return on their investment while American workers pay the price."
"The need for judicial reform in Congress has never been more clear," Carrk added, "as far-right 5th Circuit territory judges have effectively put up a giant neon sign, 'Corporations, Please Sue Here.'"
New Funding Bill Shows House Republicans 'Want Monopolists to Win'
"House Democrats must take a firm stand against this problematic proposal and offer an amendment in markup to give the Antitrust Division the resources necessary to enforce the law," said one campaigner.
Anti-monopoly campaigners on Tuesday blasted House Republicans over a bill that would dramatically reduce funding for the U.S. Department of Justice's Antitrust Division and impose caps on how much the crucial agency gets from merger filing fees.
The House Appropriations Committee
proposal contains sweeping spending cuts, including a $40 million reduction in the DOJ Antitrust Division's budget. The $192.7 million allocated for the division is $95 million less than requested by U.S. President Joe Biden.
"House Republicans are not fully funding the Antitrust Division—this is a pro-Ticketmaster, pro-Google, pro-Apple, and pro-UnitedHealth agenda," Morgan Harper, director of policy and advocacy at the American Economic Liberties Project (AELP), said in a statement.
"This is a pro-Ticketmaster, pro-Google, pro-Apple, and pro-UnitedHealth agenda."
In addition to the budget cut, the bill contains one rider that would cap the amount of fees the Antitrust Division gets from the bipartisan Merger Filing Fee Modernization Act and another that would effectively ban the agency from hiring more staff.
The proposed bill "would openly and deliberately disregard the will of Congress by limiting the DOJ's access to these funds," AELP said, arguing that House Republicans "want monopolists to win."
"With cases against some of the biggest monopolies in the economy already in progress or looming, the additional funds would allow the division to hire more attorneys and staff to effectively enforce the law," the group added.
According to Harper:
Despite having even fewer attorneys than it did in the 1970s, [Assistant Attorney General] Jonathan Kanter's Antitrust Division is securing unprecedented wins to turn the tide on market concentration across the economy. Appropriators should be bolstering the Antitrust Division in this moment, not kneecapping it by limiting hiring and reducing funds Congress authorized through the Merger Filing Fee Modernization Act.
"House Democrats must take a firm stand against this problematic proposal and offer an amendment in markup to give the Antitrust Division the resources necessary to enforce the law," Harper added.
The GOP proposal comes amid a flurry of antitrust action by the Biden administration, whose DOJ has investigated UnitedHealth Group, the world's largest health insurance company, and sued Apple, Google, and Ticketmaster. Meanwhile, the Federal Trade Commission under Chair Lina Khan has taken on Amazon and other corporations.
"The DOJ Antitrust Division has won victories in court against employers that sought to suppress workers' pay and blocked harmful mergers in the airline industry," Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.) said while addressing U.S. Attorney General Merrick Garland during a hearing earlier this month.
"You're working to lower food prices by targeting anti-competitive practices and mergers in the grocery industry and the meat processing industry, and the Antitrust Division successfully ended a price fixing scheme in DVD and Blu-ray sales and prevented video game companies from suppressing wages in e-sports," she continued.
"These are incredible accomplishments, and you're also working to promote competition in the live music industry," Jayapal added, referring to the lawsuit
filed last month by the DOJ and 30 state attorneys general against Live Nation and its Ticketmaster subsidiary.
Dems Urge DOJ to Prosecute Big Oil Price Fixing That 'Harmed Virtually Every American'
"These alleged offenses do not simply enrich corporations; hardworking Americans end up paying the price through higher costs for gas, fuel, and related consumer products," 23 senators wrote in a letter to the DOJ.
Senate Majority Leader Chuck Schumer on Thursday led over 20 Senate Democrats in calling for the U.S. Department of Justice to investigate fossil fuel companies for collusion and price fixing, arguing in a letter that the industry could have added as much as $500 in annual fuel costs for every car that an average American household has.
The senators' push follows revelations earlier this month that Scott Sheffield, founder of Pioneer Natural Resources, had allegedly colluded with the Organization of the Petroleum Exporting Countries (OPEC) to keep oil prices high in recent years. The Federal Trade Commission (FTC) filed a complaint as part of its decision to block Sheffield from taking a place on the ExxonMobil board when his company is acquired by the oil giant.
"Pioneer's and its co-conspirators' collusion may have cost the average American household up to $500 per car in increased annual fuel costs—an unwelcome tax that is particularly burdensome for lower-income families. Meanwhile, Western oil majors collectively earned more than $300 billion in profits over the last two years," Schumer (D-N.Y.) and the other senators wrote.
The price fixing may have "materially harmed virtually every American household and business," they also wrote.
The letter follows the release on Tuesday of a video by More Perfect Union, a nonprofit newsroom, examining the alleged price fixing and the impact on American consumers; the video features an interview with FTC Chair Lina Khan.
"This appears to be one of the biggest crimes in modern history," Alec Karakatsanis, a civil rights lawyer, wrote on social media in response to the video, citing the FTC's investigation.
This appears to be one of the biggest crimes in modern history. For context, if the FTC's investigation is accurate, this single crime costs people at least 10 times the amount of all property crime combined according to the FBI. https://t.co/7NT1W5B8v4
— Alec Karakatsanis (@equalityAlec) May 29, 2024
Schumer's letter comes after weeks of analysis and commentary by critics of Big Oil, which began after The Wall Street Journal broke the story on May 1 that the ExxonMobil "megadeal" would be allowed by FTC but Sheffield could not be involved. Organizations including Fossil Free Media and Groundwork Collaborative have called for a DOJ prosecution and other measures, such as a refund for American consumers, which former U.S. Labor Secretary Robert Reich also called for.
Matt Stoller, research director of the American Economic Liberties Project, argued that the FTC's evidence in the Sheffield complaint showed that oil price fixing cost the average American family $3,000 per year—a figure also used by More Perfect Union—and caused 27% of all inflation in 2021.
On May 15, Rep. Mark Pocan (D-Wis.) also called for a DOJ prosecution during a U.S. House of Representatives subcommittee meeting at which Khan testified. Pocan wrote on social media that "jail time should be seriously considered."
The price fixing scandal adds to existing pressure on the DOJ to crack down on Big Oil. Last week, Sen. Sheldon Whitehouse (D-R.I.) and Rep. Jamie Raskin (D-Md.) sent a letter to U.S. Attorney General Merrick Garland requesting that the DOJ investigate the industry's use of disinformation about climate change and its continued efforts to block a green transition. Whitehouse and Raskin led a three-year, cross-committee probe that culminated in a report issued on April 30.
Whitehouse was also among the 23 senators who signed Thursday's letter regarding price fixing, as were Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.).
"Corporate malfeasance must be confronted, or it will proliferate," the senators wrote near the end of the letter. "These alleged offenses do not simply enrich corporations; hardworking Americans end up paying the price through higher costs for gas, fuel, and related consumer products."