Judge says FTC lacks authority to issue rule banning noncompete agreements

From what I've read about it, the original idea behind non competes was to prevent high level employees with knowledge that is of such high value to a competitor that they want to negotiate a deal where you promise not to go work for a competitor for some period of time after you leave. That's fine under 1 condition. If my knowledge is that valuable then you should be willing to PAY ME not to give it to a competitor. So if I make $100k a year at my job and you want a 3 year non compete, then you have to pay me $300k (my salary times the duration of the non compete) to be unemployed for 3 years. Otherwise F you, I'm not signing one. Without that level of compensation or greater, they should be illegal.
3 years + annual COL & interest. If it's so damned valuable, yes, you should have to pay what it's worth. That's how 'capitalism' works. Except of course, when it's not working in the favor of capitalists, then they don't want capitalism. F@#$ing hypocrites.
 
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Honestly, I don't know how that will fix it. Spend 10 years enriching the "donors", and guarantee a nice 7-figure "job" at the exit door. They already have these revolving doors with regulatory agencies.
Appointments should be renewed at least every eight years. Hack Judges are more likely to be overruled by higher courts. SCOTUS 18 years and done.
 
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squiggit

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The FTC rule changes as never going to stick. It relies on novel interpretations of law that gets applauded in a Yale class room but doesn't get anywhere in front of judges. Khan lost 2 major cases against Microsoft and Meta for the same reason.
The fact that someone can say this with a straight face, especially given what the statute actually says, speaks volumes to how much of a mess the legal system is right now.
 
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This is an outright lie. I honestly cannot fathom how anyone can see what Republicans have done, and what they aim to do, and say that with a straight face
It would be more accurate to say that conservatives don't want any government that they don't or can't unilaterally own and control, in perpetuity, without being answerable or accountable to anyone*.

* - I thought about adding 'to anyone but themselves' but in truth, when you put these people in charge of anything, they don't even want to be accountable or answerable one another either. So really, what every last one of them really wants is to be dictators. Tyrannical, rabid, deceitful, greedy, vile, hateful, bigoted, intolerant, violent dictators.
 
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Wheels Of Confusion

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It would be more accurate to say that conservatives don't want any government that they don't or can't unilaterally own and control, in perpetuity, without being answerable or accountable to anyone*.

* - I thought about adding 'to anyone but themselves' but in truth, when you put these people in charge of anything, they don't even want to be accountable or answerable one another either. So really, what every last one of them really wants is to be dictators. Tyrannical, rabid, deceitful, greedy, vile, hateful, bigoted, intolerant, violent dictators.
"Only we have the legitimate authority to govern. And I'm not entirely sure you're one of us."
 
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Cloudgazer

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The fact that someone can say this with a straight face, especially given what the statute actually says, speaks volumes to how much of a mess the legal system is right now.

The FTC argues that their rulemaking power comes from section 5 and 6(g) of the FTC act.


Section 5 does have detailed rulemaking powers, unfortunately Section 5 (aka §45) also has a serious limitation



n) Standard of proof; public policy considerations

The Commission shall have no authority under this section or section 57a of this title to declare unlawful an act or practice on the grounds that such act or practice is unfair unless the act or practice causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition. In determining whether an act or practice is unfair, the Commission may consider established public policies as evidence to be considered with all other evidence. Such public policy considerations may not serve as a primary basis for such determination.


Section 5 not so useful for banning non-competes for which there's no clear story for consumer harm.

Section 6(g) (aka §46(g) which they also cite is the following



(g) Classification of corporations; regulations

From time to time classify corporations and (except as provided in section 57a(a)(2) of this title) to make rules and regulations for the purpose of carrying out the provisions of this subchapter.

Now does that look like it's intended to grant the FTC the power to basically make any rule they like about unfair competition? Or does that look like it's meant to grant the FTC the power to make rules and regulations about the classification of corporations? I don't think it takes an unreasonable judge to find the latter to be the case.

Arguing the former seems the very quintessence of hiding an elephant in a mousehole, and while that phrase may be from Scalia, the opinion was joined by Ginsberg, Souter & Stevens. Even while Chevron still stood, this rulemaking was a political stunt, it didn't even survive a quarter century old precedent.

https://en.wikipedia.org/wiki/Whitman_v._American_Trucking_Ass'ns,_Inc.
 
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The Geeman

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I would get upset about this if it wasn't for the fact there are far bigger issues in play. What with the SCOTUS ruling this week about how the Presidents can't be held criminally liable for their actions in office. The definition is so broad on what official conduct is that it pretty much gives this and any future president carte blanche on their actions. This means if a president ordered a hit on a political advisory the best that can be done would be impeachment. And there is jack anyone can do about this. Congress can't do jack. At best the SCOTUS could come back someday and reassess. But for now? They have done a wonderful job of breaking down the remaining checks and balances between the branches and putting in a mechanism to allow a dictatorship. Such a wonderful 4th of July week. :sick:
From what I understand SCOTUS have given themselves the power to decide what Presidential acts will be considered immune. Thereby telegraphing which flavour of president may be prosecuted and which is unlikely to be.
So it seems as though permission to do acts that might be illegal lies ultimately with SCOTUS after the fact. They maybe as biased and corrupt as hell but they're not stupid.
 
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I can appreciate the feeling behind this, but if Biden has this power to not acknowledge the judges he disapproves of as president so does Trump or the next Trump.

Its already been decreed that the president is actually king above the law. If they behave in the way you suggest the destruction of institutions would simply accelerate the kingdom by removing checks and balances.

Just because its a king you approve of doesn't mean the powers should exist if we want to have a democracy.

I hope there is a way to unwind the blatant corruption of the appointed judges that are clearly operating politically. In ways that involve checks and balances that reflect the will of the people, not the will of a president alone.
To argue 'x extrajudicial remedy will accelerate the demise of y government and nation on z consent of the governed principle' is not nearly as concrete a proven fact as you personally would like, or even the US Constitution would imply.

Further, conservative voters are equally happy with the slow, constant provocation of all their opposition (even when turning on one another once they have eaten all the faces) or a fast accelerated collapse of government to justify stupid libertarian drama fantasies that they can violently burn it all down and reliably set up a robust anti-ethical authoritarian system around people primarily left alone that can be more efficient among mostly small Christian family clan units keeping everyone outside the Christian doctrine as serfs to be watched with suspicion.

If the latter has to happen, the liberals are so disjointed and disorganized that they can both be honest about it and lapse back into an ethical new constitution with less pain on the consent-of-the-governed that doesn't cause nearly as many casualties or is less likely to be exploited by loopholes as a Constitution that cannot be changed due to gridlock-by-design.

In either case, the status quo only needs less than 10 years without any (or very selective) legal precedence or judicial review propping up society along with a removal of the Chevron defense to become the worst of all outcomes.

In short, the rules have changed on what is ethical or moral and are currently in transition but nobody has noticed yet that things are in freefall. You couldn't conspiracy into a more slow-but-effective collapse of effective governance than the one we have now by not using 'more speech' to silence conservative governing policy and rhetoric shortly after Nixon's term.

It'll be slow until suddenly it isn't once the correct, unknown straw breaks the camel's back. Just ask non-Taliban afghans.
 
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Cloudgazer

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From what I understand SCOTUS have given themselves the power to decide what Presidential acts will be considered immune.
What? No. SCOTUS have always had the power to decide the extent of presidential immunity. What's horrifying in the recent SCOTUS decision is where they have now drawn the line, not that they had the power to draw it. They've had that power for hundreds of years

See for instance:


View: https://www.youtube.com/watch?v=MXQ43yyJvgs
 
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DarthSlack

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What? No. SCOTUS have always had the power to decide the extent of presidential immunity. What's horrifying in the recent SCOTUS decision is where they have now drawn the line, not that they had the power to draw it. They've had that power for hundreds of years

See for instance:


View: https://www.youtube.com/watch?v=MXQ43yyJvgs


You misunderstand. Yes, they've always had the power, but by failing to define what is, or is not, an official act, they've made it the courts problem to sort that out. And Roberts then made a difficult problem even more difficult by proclaiming that the President, by conferring with his advisors, puts any discussion about illegal and unofficial acts out of the reach of prosecutors.

Seriously, this decision goes so far beyond what was needed to resolve the Trump case that there's a very compelling argument that it was a power grab by the Supreme Court.
 
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Sure, but an NDA would be better suited for that.

As the video I linked above points out there are some cases where an non-compete does make sense, but for rank and file it is very rare.

IE a business owner that sells their business, in that case it'd make sense for 'em to be bar'ed from competing with the business they just sold. Or a radio personality that a station had heavily invested in promoting turning around and taking all of the listeners to a new station. Or for a law firm someone that has developed business relationships and could then take a large part of the business with them should they leave.

But for generic restaurant that can train a replacement in an afternoon it's very bad as they're then locking the person into staying there.

In cases where an NDA would fit they should do that instead.
The business owner selling their business is one of the very few exceptions to California's non-compete ban.
 
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You misunderstand. Yes, they've always had the power, but by failing to define what is, or is not, an official act, they've made it the courts problem to sort that out. And Roberts then made a difficult problem even more difficult by proclaiming that the President, by conferring with his advisors, puts any discussion about illegal and unofficial acts out of the reach of prosecutors.

Seriously, this decision goes so far beyond what was needed to resolve the Trump case that there's a very compelling argument that it was a power grab by the Supreme Court.
Mostly because they had to. Nearly the entire Republican party covered for Trump's criminal actions. Multiple times. By refusing to impeach him, which was was their constitutional duty to perform when he broke the law -- again, multiple times -- they assisted Trump after the commission of a crime, with the intent of helping him avoid arrest and punishment. And what is the legal term for an individual who assists 1) someone who has committed a crime, 2) after the person has committed the crime, 3) with knowledge that the person committed the crime, and 4) with the intent to help the person avoid arrest or punishment? An accessory after the fact. Furthermore, that would make nearly the entire Republican party, acting in concert, with direct knowledge of the commission of a crime, part of a criminal conspiracy to protect a criminal from prosecution. Nearly the entire Republican party, at the federal level at least, would be open to prosecution for their involvement in protecting Trump. That's nearly 300 elected officials who could go to prison for their actions following January 6th.

Do you see how deep this rabbit hole goes for Republicans? Immunity for Trump was a foregone conclusion. Their entire party, all of their power, DEPENDED on it. They just had to do it in a way that wasn't binding except in the one way they wanted -- protection for Trump.
 
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NetMage

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If non-compete clauses are legal (or will be) is there any thing in US law that would prevent a company from signing up an employee for life with a non-compete clause - i.e not allowed to work for another employer ever/indentured servitude ?
Yes, actually getting someone to fill the position without suitable compensation.
 
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Yes, actually getting someone to fill the position without suitable compensation.
That presumes that the 'someone' in question has an alternative. Do you really think employees have that much power in the US? If every company demands a lifetime non-compete or no job, what choice do people really have? Non-competes are nothing more than a legal loophole to indentured servitude, which is illegal in the US, except as 'punishment' for the commission of a crime (which is yet another loophole for 'legal' slavery).
 
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IANAL but I don't think you need a non-compete to prevent an ex-employee from taking your client list with them and then trying to poach those clients. Physical and electronic copies of the client list would be property of the company just like source code or a physical blueprint would be. Even if they just know the number or names and look people up I don't think you need a non-compete to prevent poaching clients. Even then, who's to say that it wasn't the other way around. The client found out that person was no longer there and went looking for them because their loyalty was more to the person than the company?
Non-competes are silent on stealing client lists; those would be covered under non-disclosure, confidentiality, and non-solicitation clauses — not to mention under trade secrets laws.
 
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Actually, it's much simpler than that -- in Canada we've found that it's quite enough to simply stop having "abortion laws" at all. (Aside from that, also helps to implement adequate social services, accessible health care, and good education policy.)

People who don't want an abortion, just don't seek one.
People who do want abortion services, simply obtain one. They get ready access, early in the pregnancy, which not incidentally serves to avoid many of the "ethical" concerns some people might have.
People who don't want, but end up needing abortion services nonetheless, are provided with one -- promptly. The women and the medical professionals involved don't have to worry about political-legal shenanigans.

And the utterly unsurprising result? No one seeks a "late term abortion" for any other reason than necessity.

Consequently, our abortion rates are lower than in the USA. Ditto infant mortality and maternal mortality. Ditto infertility caused by complications of pregnancy or miscarriage gone wrong. (Go figure.)

Seriously, you don't need "abortion laws" at all -- at least, not for any other reason than asserting control over other people for sexist and/or religious motives.
We need abortion laws in Canada.

PEI and NB shouldn’t be able to get away with just happening not to provide abortions.

Quebec shouldn’t be allowed to require non-necessary ultrasounds, and should be required to provide abortions to non-residents the same way it works for all other medical procedures (for abortion, and only abortion, Quebec demands cash payment — literal cash, not cards or whatever).

Health Canada shouldn’t have gotten away with “studying” abortion pills for 15 years after they were approved everywhere else.
 
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Fuck this new SCOTUS.

(yes I know this wasn't a SCOTUS decision but it was almost certainly influenced by the current court's disregard for any sort of regulation or precedent that protects us commoners)
Texas courts were always going to find some way to undermine this law. It was going to SCOTUS no matter the composition of the court.
 
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Bernardo Verda

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We need abortion laws in Canada.

PEI and NB shouldn’t be able to get away with just happening not to provide abortions.

Quebec shouldn’t be allowed to require non-necessary ultrasounds, and should be required to provide abortions to non-residents the same way it works for all other medical procedures (for abortion, and only abortion, Quebec demands cash payment — literal cash, not cards or whatever).

Health Canada shouldn’t have gotten away with “studying” abortion pills for 15 years after they were approved everywhere else.
That's... fair. 🙁


(I didn't know about the Quebec "cash only" thing.
Are you sure? I'm not finding anything about that -- the info I'm finding says "free and legal" for Quebec citizens
eg. https://educaloi.qc.ca/en/capsules/abortion/ )
 
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HiTexD

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Is this concept of a “substantive” rule something with long standing in American administrative jurisprudence? Or is it a concept this judge has essentially invented in this ruling, like SCOTUS recently invented the “major questions doctrine”?
I doubt it's coming only from this judge. IMO, these are marching orders coming down from conservative think tanks and other conservative groups. A conservative-majority SCOTUS was just one part of the plan. Getting conservative/"Friendly" federal judges in place was also part of a much bigger plan. There are 881 non-SCOTUS judges at the federal level. Sounds all foil-hat and such but, I mean... look.
 
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Bernardo Verda

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I doubt it's coming only from this judge. IMO, these are marching orders coming down from conservative think tanks and other conservative groups. A conservative-majority SCOTUS was just one part of the plan. Getting conservative/"Friendly" federal judges in place was also part of a much bigger plan. There are 881 non-SCOTUS judges at the federal level. Sounds all foil-hat and such but, I mean... look.
Not foil-hat at all;

That's what McConnell and the republicans were actually devoting most of their time and effort to, during Trump's term -- stuffing as many "allies" into federal benches as they possibly could, while the stuffing was good and no one could stop them.
 
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I doubt it's coming only from this judge. IMO, these are marching orders coming down from conservative think tanks and other conservative groups. A conservative-majority SCOTUS was just one part of the plan. Getting conservative/"Friendly" federal judges in place was also part of a much bigger plan. There are 881 non-SCOTUS judges at the federal level. Sounds all foil-hat and such but, I mean... look.

There's nothing tin-foil-hat about it. That was one of the plans.

PBS - How McConnell’s Bid to Reshape the Federal Judiciary Extends Beyond the Supreme Court

McConnell’s Strategy During Obama’s Presidency

It wasn’t President Obama’s decision to leave the judicial vacancies, however. Just as McConnell helped cement a conservative majority on the Supreme Court for decades to come, judicial experts and journalists who spoke to FRONTLINE for Supreme Revenge, a 2019 documentary examining the political battle over the highest court, credited McConnell with holding open vacancies that Trump then filled with conservative federal judges at a breakneck pace.

McConnell himself took credit for the strategy in a December 2019 interview with Sean Hannity of Fox News. When Hannity wondered why President Obama left so many vacancies, McConnell said: “I’ll tell you why. I was in charge of what we did the last two years of the Obama administration.”

McConnell “completely changed the nature of congressional warfare against Obama and Democratic judicial nominees,” Norman Ornstein, a political scientist at the conservative think tank American Enterprise Institute, told FRONTLINE in 2019.

McConnell was exposed to the machinations of judicial appointments early in his career, when he worked for Marlow Cook, a U.S. senator from Kentucky who sat on the Senate Judiciary Committee. During his time as a staffer for Cook, McConnell saw two of President Richard Nixon’s Supreme Court nominees rejected.

“It was in those years that McConnell really came to understand the importance, the centrality of judicial nominations in our political system, both the Supreme Court nominations and also … federal lower-court nominations,” Alec MacGillis, a ProPublica reporter and author of “The Cynic: The Political Education of Mitch McConnell,” told FRONTLINE in 2019.

The young McConnell also learned “what it takes to get these nominations through the Senate, to really kind of figure out how to win that game, the game of judicial politics,” MacGillis said.

And that's just one plan. It doesn't take much digging to find the others, especially since conservatives are emboldened to crow about them.
 
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The FTC doesn't need to make a rule implementing the law for prosecutors to enforce the law in an identical way. The law is being enforced either way. Either noncompetes are a breach of the law or they aren't. The FTC rule doesn't change that.
That's definitely not the situation here - the FTC have used their rulemaking powers to make noncompetes illegal. Not somehow determined that non-competes were always illegal.

There's no question that prior to this rule-making they weren't illegal (at least not federally).
There's no question that, if the FTC has the power to make this rule that they won't be illegal afterwards (except with narrow exceptions).

Both the FTC and their opponents agree on these points.
 
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That's... fair. 🙁


(I didn't know about the Quebec "cash only" thing.
Are you sure? I'm not finding anything about that -- the info I'm finding says "free and legal" for Quebec citizens
eg. https://educaloi.qc.ca/en/capsules/abortion/ )
For residents enrolled in the health system, yes.

For all medical procedures except abortion, visitors from another province show their out-of-province health card, and Quebec just bills that other province for the procedure. For international visitors you pay up-front (hopefully you have someone else who can confuse the admin staff while you sneak into triage) and deal with reimbursement from your insurer or home health system or whatever.

For abortion, and only abortion, Quebec will not bill the other province. You pay up front, as if you were an international visitor. And unlike any other medical procedure, part of the payment (I oversimplified earlier) is required to be cash paid direct to the doctor. It's utterly weird.

There's also private clinics. Quebec lost a court case and is required to reimburse residents who go to the private abortion clinics (abortion only) because the hospitals weren't reasonably offering the service. But, other provinces won't reimburse the clinic bill. That said, the hospital bill is about 4x what other provinces will reimburse, whereas the private clinic bill is only 2x, so you're better off at the private clinic. Which is also a nice comforting place rather than being literally in the basement, past the laundry. Plus they take credits cards.

(I might have gotten a student from another province slightly pregnant once.)
 
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real mikeb_60

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SCOTUS destroyed Chevron Deference which in no uncertain terms has killed the entire function of the administrative state. They also decided that the U.S. president is immune from anything and everything in their "official capacity" which is one of those nice vague wording which can be interpreted to mean whatever they want. They even specifically answered the question of whether a president would be immune from politically assassinating their rivals with SCOTUS answering yes. The checks and balances are gone. The destruction of institutions is just about to begin in its totality. If you truly believe Trump a grave threat to the future of this country than you should be encouraging Biden to simply ignore this ruling. He's already been given cover to do so.
I'm seeing the evolution of Tolnedran* politics based on the recent SC rulings.

* See Eddings' Belgariad and similar stories. Essentially, the one who survives the various murders and maimings wins.
 
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Mrktmind

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"The issue presented is whether the FTC's ability to promulgate rules concerning unfair methods of competition include the authority to create substantive rules regarding unfair methods of competition," Brown, a Trump appointee, wrote.


Brown acknowledged that "the FTC has some authority to promulgate rules to preclude unfair methods of competition." But "the text, structure, and history of the FTC Act reveal that the FTC lacks substantive rulemaking authority with respect to unfair methods of competition under Section 6(g)," she wrote.

LMAO!! I must give Ms. Brown kudos! Working in an industry of professional liars Ms. Brown just wrote one of the most artful pieces of deception I have read. This should be required reading for those attending law school and just starting to learn the trade. I wonder of the legal industry has an award for the best lies? I'm thinking it might be the Bambalance R Chaser III Bullshit Award.
 
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Bernardo Verda

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For residents enrolled in the health system, yes.

For all medical procedures except abortion, visitors from another province show their out-of-province health card, and Quebec just bills that other province for the procedure. For international visitors you pay up-front (hopefully you have someone else who can confuse the admin staff while you sneak into triage) and deal with reimbursement from your insurer or home health system or whatever.

For abortion, and only abortion, Quebec will not bill the other province. You pay up front, as if you were an international visitor. And unlike any other medical procedure, part of the payment (I oversimplified earlier) is required to be cash paid direct to the doctor. It's utterly weird.

There's also private clinics. Quebec lost a court case and is required to reimburse residents who go to the private abortion clinics (abortion only) because the hospitals weren't reasonably offering the service. But, other provinces won't reimburse the clinic bill. That said, the hospital bill is about 4x what other provinces will reimburse, whereas the private clinic bill is only 2x, so you're better off at the private clinic. Which is also a nice comforting place rather than being literally in the basement, past the laundry. Plus they take credits cards.

(I might have gotten a student from another province slightly pregnant once.)
Okay. That's definitely not good.

But this also sounds like it's not a question of legality, nor abortion laws, but "just" typical Quebec not playing well with other provinces, for "'cause reasons" or "separate society" bullshit, and as usual it's coming out in administrative bureaucratic hassle. (Also likely some inertia/lingering Catholic influence, especially on hospital administration -- which I've seen in Vancouver's Catholic hospital as well.)
 
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amireal

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The judge acknowledges "FTC's ability to promulgate rules concerning unfair methods of competition" but concludes that "the FTC lacks substantive rulemaking authority with respect to unfair methods of competition". That means the FTC's authority in that regard is exclusively procedural.

Doesn't that essentially mean the FTC can't outright ban non-compete clauses but can effectively make them unenforceable?
 
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numerobis

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Okay. That's definitely not good.

But this also sounds like it's not a question of legality, nor abortion laws, but "just" typical Quebec not playing well with other provinces, for "'cause reasons" or "separate society" bullshit, and as usual it's coming out in administrative bureaucratic hassle. (Also likely some inertia/lingering Catholic influence, especially on hospital administration -- which I've seen in Vancouver's Catholic hospital as well.)
Did you miss the part about how all other medical procedures are handled just fine? It is very definitely about abortion.

And, sure, it's not in the laws. This matters to ... nobody at all. There were large parts of the US with no abortion access for a decade before Roe v Wade was overturned, because of various roadblocks put in the way despite the law. If you don't have access to medical care, you don't have access to medical care.
 
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GrayBit

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The article is a bit disingenuous, the Judge didn't yet rule.
They just put in a stay so it's not in effect, which it wouldn't be in effect yet anyway.
The Judge will make a ruling before the scheduled effective date.

Effectively what the judge has done is, things stay as is till the judge can review everything, and things weren't scheduled to change yet anyway.


View: https://youtu.be/151YIdmQ3yY?si=F3yTilofEtpmRah2



It's effectively like saying, you can't leave the parking lot till someone makes a decision at 4:50PM, but you weren't planning to leave till 5:00PM anyway. If the judge sides with the FTC then the stay is dropped, if the judge sides against then the stay becomes permanent. Ether way it'll be appealed.

Just like the SCOTUS ruled that the US President could order a hit? (and be immune)

Edit: Tbh. you seem very keen to defend the SCOTUS et. al.... I wonder why? No, I don't really anymore.
 
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On the plus side, Clarence will have to wait at least a year before dismantling OSHA.

 
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GrayBit

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On the plus side, Clarence will have to wait at least a year before dismantling OSHA.

While that is a plus, I'd say it's of little comfort... If he does do it in one year.
Your system is broken and corrupt.

Edit: It's very baffling to me, how a SCOTUS judge can be this corrupt, and still noone can do anything about it. It's ... flabbergasting.
 
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