| The question before the Court in this case was whether the FTC has the power to issue substantive rules related to unfair methods of competition. The Court concludes[0] that the FTC does not have that power, and that Section 6(g) of the FTC Act permits the FTC only to issue "housekeeping" rules related to agency organization, procedure, or practice. That follows from three main statutory and historical clues: 1) Section 6(g) contains no penalty provision—which indicates a lack of substantive force. Other grants of substantive rulemaking specify what happens if regulated entities don't follow the rule. 2) The location of Section 6(g) is suspect. It's the seventh in a list of twelve almost entirely investigative powers, and starts with a grant of organizational power to "from time to time classify corporations". This is hardly where you would expect to find sweeping substantive rulemaking power if Congress had in fact chosen to grant it. 3) The FTC has not historically seen itself as possessing the power to issue substantive rules on unfair methods of competition. Courts are skeptical of agencies discovering latent powers decades later. Overall, this is exactly what commentators expected to happen. Banning noncompetes may well be good policy, but it's up to the legislature (whether Congress or in individual states) to enact that policy. In addition, nothing in this decision prevents the FTC from using its adjudicatory powers to go after individual examples of noncompetes which it believes are unfair methods of competition. [0] https://storage.courtlistener.com/recap/gov.uscourts.txnd.38... |