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FTC ban on worker noncompete deals blocked by federal judge

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A federal judge ruled the U.S. 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, U.S. District Judge Ada Brown in Dallas sided with the U.S. 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.  

Federal Trade Commission headquarters.jpg
The U.S. Federal Trade Commission headquarters in Washington, D.C.

Andrew Harrer/Bloomberg

“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 U.S. Chamber of Commerce called the ruling a significant win in its “fight against government micromanagement of business decisions.”

The FTC’s rule was “an unlawful extension of power that would have put American workers, businesses and our economy at a competitive disadvantage,” the chamber said in a statement.

Noncompete agreements have become increasingly common in the U.S., with an estimated 20% of workers — roughly 30 million Americans — subject to them. The agency had argued the provisions harm workers, while employers claimed they help protect their investments in employees. Only a handful of states bar noncompetes.

A ban on such agreements would impact businesses and people across the workforce — everyone from doctors to tax professionals to hair stylists — and shift the balance of power between bosses and staff. 

The FTC maintains that it had the authority to approve the rule in April, as part of its duty to ward off unfair methods of competition. Graham said the agency will still seek to protect workers limited by noncompete agreements. 

“Today’s decision does not prevent the FTC from addressing noncompetes through case-by-case enforcement actions,” Graham said.

Brown’s decision could be appealed to the conservative U.S. 5th Circuit Court of Appeals in New Orleans. The appeals court has become a favorite for conservative opponents of President Joe Biden’s policies related to federal regulatory power, guns, abortion and social media regulation.

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.

The case is Ryan v. Federal Trade Commission, 3:24-cv-00986, U.S. District Court, Northern District of Texas (Dallas).

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Accounting

Developing future leaders in accounting: the new imperative in an AI and automation driven era

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As technology continues to automate routine tasks, the role of finance professionals is evolving, demanding deeper capabilities in critical thinking, communication and business acumen. 

Many of PrimeGlobal’s North American firms are focused on cultivating these skills in their future leaders. Carla McCall, managing partner at AAFCPAs, Randy Nail, CEO of HoganTaylor, and Grassi managing partner Louis Grassi shared their views with PrimeGlobal CEO Steve Heathcote on the need for future leaders to balance technological proficiency with human-centered skills to thrive.

AI is transforming the sector by streamlining workflows, automating data analysis and reducing manual processes. However, rather than replacing accountants, AI is reshaping their roles, enabling them to focus on higher-value tasks. In the words of Louis Grassi, AI can be seen as a strategic partner, freeing accountants from routine tasks, enabling deeper engagement with clients, more thoughtful analysis, and ultimately better decision-making. 

Nail emphasized the importance of embracing AI, warning that those who fail to adapt risk being replaced by professionals who leverage the technology more effectively. HoganTaylor’s “innovation sprint” generated over 100 ideas for AI integration, underscoring why a proactive approach to adopting new technologies is so necessary and valuable.

McCall advocates for an educational shift that equips professionals with the skills to interpret AI-generated insights. She stressed that accounting curricula of the future must evolve to incorporate advanced technology training, ensuring future accountants are well-versed in AI tools and data analytics. Moreover, simulation-based learning is becoming increasingly crucial as traditional methods of education become obsolete in the face of automation.

Talent development and leadership growth

As AI reshapes the profession, firms must rethink how they develop and nurture their future leaders. To attract and retain top talent, firms need to prioritize personalized development plans that align with individual career goals. 

HoganTaylor’s approach to talent development integrates technical expertise with leadership and communication training. These initiatives ensure professionals are not only proficient in accounting principles but also equipped to lead teams and navigate complex client interactions.

Nail underscored the growing importance of writing and presentation skills, as AI will handle routine tasks, leaving professionals to focus on higher-level analytical and decision-making responsibilities.

Soft skills are the success skills

While technical proficiency remains vital, future leaders must also cultivate critical thinking, communication and adaptability — skills McCall refers to as the “success skills.” McCall highlights the necessity of business acumen and analytical communication, essential for interpreting data, advising clients and making strategic decisions. 

Recognizing teamwork and collaboration remain crucial in the hybrid work environment, McCall explained in detail how AAFCPA fosters collaboration through structured remote engagement strategies such as “intentional office time,” alcove sessions and stand-up meetings. Similarly, HoganTaylor supports remote teams by offering training for career advisors to ensure effective mentorship and engagement in a dispersed workforce.

McCall emphasized why global experience can be valuable in leadership development. Exposure to diverse markets and accounting practices enhances professionals’ adaptability and broadens their perspectives, preparing them for leadership roles in an increasingly interconnected world.

Grassi reminded us that an often-overlooked leadership skill is curiosity. In his view the most effective leaders of tomorrow will be inherently curious — not just about emerging technologies but about clients, market shifts and global trends. Encouraging curiosity and continuous learning within our firms will distinguish the true industry leaders from those simply reacting to change.

A balanced future

What’s clear from speaking to our leaders is PrimeGlobal’s role in fostering trust, community and knowledge sharing. McCall recommended member-driven panels to discuss AI implementation and automation strategies and share best practice. Nail, on the other hand, valued PrimeGlobal’s focus on addressing critical industry issues and encouraged continuous evolution to meet professionals’ changing needs.

The future of leadership in the accountancy profession hinges on a balanced approach, leveraging AI to enhance efficiency while cultivating essential human skills that technology cannot replicate, which Grassi highlights skills including leadership and building client trust.

As McCall and Nail advocate, the next generation of accountants must be agile thinkers, skilled communicators and strategic decision-makers. Firms that invest in these competencies will not only stay competitive but will also shape the future of the industry by developing well-rounded leaders prepared for the challenges ahead.

By investing in both AI capabilities and essential human skills, firms can not only future proof their leadership but also shape a resilient and forward-thinking profession ready to meet the challenges of the future.

As Grassi concluded, while technical skills provide the foundation, leadership in accounting increasingly demands emotional intelligence, empathy and adaptability. AI will change how we perform our work, but human connection, trust and nuanced judgment are irreplaceable. Investing in these human-centric skills today is critical for firms aiming to build resilient leaders of tomorrow. To remain relevant and thrive, professionals must prioritize developing strong success skills that will define the leaders of tomorrow.

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Accounting

On the move: KPMG adds three asset management, PE leaders

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Wipfli appoints new chief growth officer; Illinois CPA Society installs latest board of directors; and more news from across the profession.

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Accounting

Employers added 228K jobs in March, but lost 700 in accounting

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Employment rose by a stronger than expected 228,000 jobs in March, although the unemployment rate inched up one-tenth of a point to 4.2%, the U.S. Bureau of Labor Statistics reported Friday.

Despite the mostly upbeat jobs report, the stock markets nevertheless plunged amid widespread concern over the steep “reciprocal” tariffs announced Wednesday by President Trump. 

The professional and business services sector added 3,000 jobs, but lost 700 jobs in accounting, tax preparation, payroll and bookkeeping services. The biggest job gains occurred in health care, social assistance, transportation and warehousing. Employment also grew in the retail trade industry, in part due to the return of workers from a strike in the food and beverage industry. But federal government employment declined by 4,000 in March, after a loss of 10,000 in February, amid job cuts ordered by the Elon Musk-led Department of Government Efficiency. However, the Internal Revenue Service is reinstating approximately 7,000 probationary employees who had been placed on paid administrative leave and asking them to return to work by April 14.

Average hourly earnings rose in March by 9 cents, or 0.3%, to $36.00. Over the past 12 months, average hourly earnings have increased 3.8%.

Trump boasted about the jobs report in an all-caps post on Truth Social, writing, “GREAT JOB NUMBERS, FAR BETTER THAN EXPECTED. IT’S ALREADY WORKING. HANG TOUGH, WE CAN’T LOSE!!!”

Congressional Democrats disagreed. “Unemployment is rising, and this seems to be the last report buoyed by Democrats’ blockbuster job creation,” said House Ways and Means Committee ranking member Richard Neal, D-Massachusetts, in a statement. “Recession odds are getting higher by the day as Trump plagues our economy with the largest tax hike in decades. Wages would need to skyrocket for the people to weather Trump’s higher prices and needless uncertainty. This report doesn’t yet reflect the dangerous firings of thousands of public servants or the layoffs that started hours after he announced the Trump Tariff Tax. This administration is ruling through the lens of billionaires — sacrificing workers’ paychecks, destroying trillions of dollars in savings and retirement wealth, readying more than $7 trillion in tax giveaways to primarily benefit the rich, all to bring down interest rates, and ultimately, pad their own pockets.”

Economists are predicting fallout from the historic tariff increases announced by Trump. “We now have more clarity on the trade policy following ‘Liberation Day’ on April 2,” wrote Appcast chief economist Andrew Flowers. “The average effective tariff rate is now above the level set by the Smoot-Hawley tariffs in 1930. This is one of the largest changes to economic and global trade policy since President Nixon’s decision to move away from the gold standard more than 50 years ago. The impending fallout from retaliatory tariffs from our trading partners across Europe and Asia will radically shift employment growth across manufacturing, retail and construction as consumer goods prices rise.”

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