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Bloomberg: FTC Ban on Worker Noncompete Deals Blocked by Federal Judge
A federal judge ruled the US Federal Trade Commission can’t enforce its near-total ban on noncompete agreements that was set to go into effect next month, blocking an effort by the agency to make labor markets more competitive. In a ruling Tuesday, US District Judge Ada Brown in Dallas sided with the US Chamber of Commerce and a Texas-based tax firm that sued to block the measure. The judge said the FTC lacked the authority to enact the ban, which she said was “unreasonably overbroad without a reasonable explanation.” The ruling represents a significant blow for the FTC and further divides the judiciary over the regulator’s powers. A federal judge in Pennsylvania had previously sided with the FTC. The rule is likely to be headed for appellate review. Brown had previously delayed implementation of the ban, which was scheduled to take effect on Sept. 4. “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,” FTC spokesperson Victoria Graham said in a statement. “We are seriously considering a potential appeal.” … The case in Dallas is one of three lawsuits challenging the FTC’s non-compete rule and the most advanced. The others are pending in Florida and Pennsylvania, with one judge initially siding with the FTC and the other against. Neither of those suits has yet reached a final determination on the FTC’s rulemaking authority.
E&E News: Democrats worry a new Supreme Court precedent will be ‘used and abused’ to thwart Biden’s legacy ($)
President Joe Biden executed one of the most sweeping progressive agendas on labor, climate change and “corporate greed” in recent decades — only to see the Supreme Court lay it so bare that a Kamala Harris victory may not protect large chunks of it. A suite of Supreme Court rulings this summer freed up federal judges to freeze many regulations the president once campaigned on or enacted to get around a deeply divided Congress. In Texas, a federal judge blocked Biden’s ban on noncompete agreements for workers, and a judge in Mississippi stopped his discrimination protections in health care for transgender people. And an Ohio-based appeals court temporarily halted a policy preventing internet companies from throttling service. Biden appointees have spent years writing rules to crack down on credit card late fees, require airlines to fork over cash refunds and make millions more people eligible for overtime pay while reining in polluting industries. But the future of those policies, along with the president’s unfinished business on student debt relief and artificial intelligence, are far less secure than they were just two months ago. While having a successor from the same party long served as the simplest way for presidents to protect and continue their legacies, the high court has made it harder for Harris to defend Biden’s even if she bests former President Donald Trump. The court rulings, particularly one overturning the “Chevron doctrine,” now make it more difficult for Harris to secure her own agenda — or even, in some cases, for Trump to cement his.
The Wall Street Journal: Schumer Optimistic About Passing Federal AI Regulation This Year ($)
Despite deep concerns about the safety of artificial intelligence, efforts to pass legislation to address its risks have been elusive in the U.S. Lawmakers at the Democratic National Convention say they continue to push for an election year breakthrough. “We’re going to get a great AI package which keeps innovation as our North Star, hopefully through the Congress by the end of the year. We have great prospects,” said Senate Majority Leader Chuck Schumer (D., N.Y.). In July, the Senate Commerce, Science, and Transportation Committee advanced a group of AI bills, including a bipartisan Future of Artificial Intelligence Innovation Act, designed to maintain U.S. global leadership in AI and other emerging technologies. But some remain skeptical. Regulation in the U.S. has been slow moving, and could be even more so with both parties focused on the impending presidential election. Washington has a poor record of moving quickly on tech, and the U.S., unlike the European Union, lacks a comprehensive set of rules like the bloc’s Artificial Intelligence Act, which took effect in August. In the U.S., the closest most comprehensive federal guidelines may be found in the Biden administration’s 2023 executive order on safe, secure and trustworthy AI. When it comes to actual legislation, much momentum has shifted to individual states, including Colorado and California—a phenomenon that could result in a complex patchwork of varying regulations and requirements that differ from state to state.
MarketWatch: Kamala Harris backs Biden’s tax proposals — including a tax on unrealized capital gains
In the first few days of Kamala Harris’s 2024 presidential campaign, experts told MarketWatch that her stances on taxes probably would closely resemble those of President Joe Biden. One month into her campaign, it looks like that is indeed the case. Multiple published reports this week have said the Democratic presidential nominee supports the tax increases put forth in Biden’s most recent budget proposal, which came out in March. The Biden budget called for new taxes on wealthy Americans, corporations and business owners — including a controversial idea to tax unrealized capital gains as income for those with more than $100 million. An unrealized capital gain, also called a paper profit, refers to an increase in value for an asset that a person hasn’t sold yet, whether it’s a share in a business or a property. … Biden’s most recent budget proposal features other ideas related to capital gains. Other plans would “increase the top marginal rate on long-term capital gains and qualified dividends to 44.6 percent,” the Treasury Department said. The Harris campaign didn’t immediately respond Wednesday to MarketWatch’s request for comment. But a Harris campaign official told MarketWatch earlier this month that investors should look to the recent budget, and not stances taken by Harris before her time as vice president, as a guide for her policy preferences.
The Associated Press: Canada’s 2 major freight railroads at a full stop; government officials scramble
Business and consumers throughout Canada and the U.S. were in danger of suffering significant economic harm after Canada’s major freight railroads came to a full stop Thursday because of a contract dispute with their workers. Canadian government officials met urgently to discuss the shutdown. Canadian National and CPKC railroads both locked out their employees after the 12:01 a.m. EDT deadline Thursday passed without new agreements with the Teamsters Canada Rail Conference, which represents about 10,000 engineers, conductors and dispatchers. All rail traffic in Canada and all shipments crossing the U.S. border have stopped, although CPKC and CN’s trains will continue to operate in the U.S. and Mexico. Billions of dollars of goods each month move between Canada and the U.S. via rail, according to the U.S. Department of Transportation. Many companies across all industries rely on railroads to deliver their raw materials and finished products, so without regular rail service they may have to cut back or even close. Both railroads have said they would end the lockout if the union agreed to binding arbitration, while unions indicated that they were still at the bargaining table.
The Associated Press: Fed minutes: Most officials favored a rate cut in September if inflation continued to cool
Most Federal Reserve officials agreed last month that they would likely cut their benchmark interest rate at their next meeting in September as long as inflation continued to cool. The minutes of the Fed’s July 30-31 meeting, released Wednesday, said the “vast majority” of policymakers “observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.” … Wall Street traders had already considered it a certainty that the Fed will announce its first interest rate cut in four years when it meets in mid-September, according to futures prices. A lower Fed benchmark rate would lead eventually to lower rates for auto loans, mortgages and other forms of consumer borrowing and could also boost stock prices. The minutes of the Fed’s meetings sometimes reveal key details behind the policymakers’ thinking, especially about how their views on interest rates might be evolving. Further guidance on the Fed’s next steps is expected when Chair Jerome Powell gives a highly anticipated speech Friday morning at the annual symposium of central bankers in Jackson Hole, Wyoming.
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