Select a category

Noncompete agreements in employment contracts are still allowed, at least for the time being, a federal court has ruled. 

A federal court on Tuesday struck down a Federal Trade Commission (FTC) rule that would have banned most noncompete agreements beginning Sept. 4. The ruling by Judge Ada Brown, a judge in the district court for the northern district of Texas, sets up a potential high-stakes legal battle in the Supreme Court, should federal regulators appeal the decision.

The FTC had sought to block the enforcement of provisions in employment contracts that stopped workers from switching jobs or setting up their own businesses, deeming it an anti-competitive and unfair trade practice. About 30 million workers, or one in five Americans, have some sort of noncompete agreement, the FTC said. 

The U.S. Chamber of Commerce, a trade group representing business, had sued together with Ryan, a Texas-based tax software company and two Texas trade groups to block the rule. They argued the agency exceeded the powers granted to it by Congress. In the ruling, Brown sided with the business groups against the government.“The Rule is arbitrary and capricious, the Court must ‘hold unlawful’ and ‘set aside’ the FTC’s Rule,” Brown wrote.Research by the FTC showed banning noncompetes would boost workers' earnings by an average of $524 a year and result in 8,500 new businesses being founded each year.Blocking noncompetes was also popular with workers, according to a survey released the same day as the ruling. The poll by job search site Monster.com, conducted in August, showed 94% of workers supported the ban.

The court ruling was the latest legal setback for President Joe Biden's administration. 

Federal courts and the Supreme Court have blocked several attempts by the White House to use the power of federal agencies, including the FTC and the Consumer Financial Protection Bureau, to make rules favoring consumers and workers over businesses.

In May, a different federal court blocked a CFPB rule limiting credit card late fees. In June, the Supreme Court overturned an Environmental Protection Agency rule in a ruling that could make it easier for opponents of many different federal regulations to have them tossed out in court. 

Should the FTC decide to appeal the ruling, it would go to the 5th Circuit Court of Appeals and then possibly the Supreme Court. The federal agency would likely face an uphill battle, said Kevin Paule, an attorney at Hill Ward Henderson who has litigated cases involving noncompete agreements. 

“Based on similar recent rulings regarding actions by executive agencies, the betting line would be on the court affirming what the Texas Court does, meaning the Supreme Court's unlikely to allow the FTC to do this,” Paule said in an interview with Investopedia.However, that doesn’t necessarily mean businesses have the green light for noncompete agreements in general—some states have restricted noncompetes in recent years, and the FTC may still crack down on individual cases where regulators believe agreements were abusive or deceptive. 

“Companies and employers don't have to do anything as of today or as of Sept. 4, but they may still want to give some thought as to how they want to craft their agreements and whether there's a better way to protect their business interests than just relying on a noncompete,” Paule said.

Read more on Investopedia

Americans believe you need an average net worth of $2.5 million to be considered wealthy, up from $2.2 million in 2023 and 2022, a recent survey from Charles Schwab found .

Being wealthy means different things to different people. You don't necessarily have to be in the top 1% to be considered wealthy, but the survey showed the amount of money some people think they need to meet the threshold varies by generation and where they live. 

Older generations, on average, reported that it takes a much higher net worth to be considered wealthy or financially comfortable compared to younger ones.

Baby Boomers, born between 1948 and 1964, reported that you need an average net worth of $2.8 million to be wealthy and $780,000 to be financially comfortable. 

In contrast, Gen Z, born between 1997 and 2002, believes you need a much lower amount to be wealthy, $1.2 million, and $406,000 to be financially comfortable.

Here’s the average net worth you need to have to be considered wealthy, according to each generation:

Generally, residents of high-cost cities or regions reported needing a much higher net worth than residents of more affordable areas.

Of the geographic regions surveyed, San Francisco, Southern California, and New York residents had the highest thresholds for what it takes to be wealthy or even financially comfortable. Phoenix, Dallas, and Houston had the lowest thresholds.

Here’s the net worth that residents of different geographic regions and cities think you need to be wealthy:

Only 21% of survey respondents said they thought they’d be wealthy in their lifetimes. However, younger generations were more hopeful about the possibility of being wealthy—29% of Gen-Zers and 28% of millennials reported they were on track to be wealthy.

Many Americans also don’t think they’re currently in control of their finances: just 18% of Americans reported feeling on top of their finances, and Baby Boomers were the most likely to say they were. 

Although many respondents don’t think they’re on track to be wealthy, many still gave themselves a passing grade when it came to rating their own finances. More than two-thirds of Americans gave themselves an A, B, or C grade on how prepared they were for retirement and how much they had invested.

Read more on Investopedia

It turns out employers weren’t hiring last year at quite the breakneck pace that official government statistics originally reported.

On Wednesday, the Bureau of Labor Statistics downwardly revised the number of jobs added in the 12 months through March 2024, by 818,000, meaning that 0.5% fewer jobs were added than initial reports indicated.

The drop was in line with expectations of forecasters, who had predicted a downward revision of anywhere from 600,000 to 1 million jobs, according to economists at Goldman Sachs. Should the preliminary estimate (itself subject to further revisions) hold, it would be the largest downward revision since 2009 and would mean that the economy added an average of 178,000 jobs per month instead of 246,000.

While the revision was expected—the bureau revises its numbers every year based on data it receives from state unemployment tax records, usually downshifting what they initially reported—it could shift how policymakers at the Federal Reserve view the job market. The Fed has said it is increasingly focusing on the labor market as it weighs possible interest-rate cuts.

While the revised figure is “still a solid number,” it “raises the risk that the numbers we're seeing now are in actuality lower,” Ernie Tedeschi, former chief economist at the White House, posted on X, the social media platform formerly known as Twitter. 

The job market has been one of the bright spots in an economy battered by higher-than-normal inflation and high interest rates from the Fed. Employers have continued hiring, keeping unemployment low and avoiding a recession. That’s despite the fact that borrowing costs on all kinds of loans have been pushed up by the Fed raising its benchmark interest rate to its highest since 2001 to combat inflation. 

The resilient job market has fueled hopes that inflation could simmer down without the wave of mass layoffs and recessions that have usually followed the central bank’s rate-hike campaigns historically.Several economists said the large downward revision to hiring statistics could dim those hopes, but it doesn’t signal the economy is in a recession just yet. The revision comes at a time when the Fed is preparing to lower interest rates, shifting its focus from taming inflation to trying to prevent a spike in unemployment.“This doesn’t challenge the idea we’re still in an expansion, but it does signal we should expect monthly job growth to be more muted and put extra pressure on the Fed to cut rates,” Robert Frick, corporate economist with Navy Federal Credit Union, wrote in a commentary.

The Fed is widely expected to cut its benchmark interest rate  by at least a quarter point when its policy committee next meets in September. After the revision, financial markets raised their bets for the Fed to cut rates more steeply.

As of Wednesday afternoon, traders were pricing in a 34.5% chance the Fed would cut its rate by half a percentage point from its current range of 5.25%-5.50%, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data. Those chances are up from a 29% chance the previous day.

More aggressive rate cuts from the Fed would put more downward pressure on interest rates for all kinds of loans, including mortgages, car loans, and credit cards. 

Read more on Investopedia