Trade groups representing the hospital, insurance, and financial services industries are pushing courts to block the Federal Trade Commission’s noncompete ban amid a divide in the judiciary over the regulator’s powers.

The American Hospital Association and the Federation of American Hospitals, which each represent thousands of US hospitals and health systems, submitted a brief Monday in the US District Court for the Northern District of Texas opposing the rule.

The American Property Casualty Insurance Association also filed a brief in the Texas case calling for a judgment against the FTC. Groups including the American Investment Council and the Managed Funds Association, meanwhile, filed a brief July 24 in the Middle District of Florida supporting a separate challenge to the noncompete regulation.

Many of the groups argued that the FTC lacks statutory authority to issue the rule, while asserting that noncompete contracts are beneficial ways to protect training investments and safeguard confidential information.

The hospital associations also raised some of the unique dynamics in its industry, where the majority of hospitals are nonprofits. The FTC lacks the statutory power to apply the noncompete rule to nonprofit hospitals, meaning the rule will create an “uneven playing field” in the health-care labor market, they said.

The push from industry comes as judges throughout the US weigh lawsuits against the FTC rule, which would largely bar businesses from using contracts that place restrictions on an employee’s ability to move jobs.

Judge Kelley Brisbon Hodge of the Eastern District of Pennsylvania on July 23 ruled that the FTC had the authority to issue such a rule, denying a challenger’s motion for a preliminary injunction. Weeks earlier, Texas Judge Ada Brown reached the opposite conclusion while granting a preliminary injunction for a tax firm and the US Chamber of Commerce.

Brown said she will make a final ruling on the merits by Aug. 30, just days before the FTC rule is set to go into effect. Plaintiffs in that case are also seeking a nationwide injunction.

The judge in Florida has yet to rule on a real estate firm’s motion for a preliminary injunction.

Roughly 30 million Americans—or one in five workers—are subject to noncompete contracts, according to an FTC estimate. The agency argues that noncompetes impose harsh burdens on workers and that eliminating them would bolster opportunities and increase wages.

The cases are Ryan LLC v. FTC, N.D. Tex., No. 3:24-cv-986, 7/29/24, ATS Tree Servs. LLC v. FTC, E.D. Pa., No. 2:24-cv-01743, 7/23/24, and Props. of Village Inc. v. FTC, M.D. Fla., No. 5:24-cv-00316, 7/24/24.