FTC's bid to ban noncompete agreements rejected by federal judge in Texas

the big 'no'

In a ruling Tuesday, U.S. District Judge Ada Brown granted a motion for summary judgement filed by the U.S. Chamber of Commerce and other plaintiffs, and rejected the FTC's own petition for a judgement in its favor. Photo via Getty Images

A federal judge in Texas has blocked a new rule from the Federal Trade Commission that would have made it easier for employees to quit a job and work for a competitor.

In reaching his decision, Brown concluded that that the FTC “exceeded its statutory authority” in making the rule, which the judge called “arbitrary and capricious." The judge also concluded that the rule would cause irreparable harm.

As a result of the court's decision, the FTC won't be able to enforce its rule, which was set to go into effect on Sept. 4, according to the judge's ruling.

Still, the decision does not prevent the agency from addressing noncompete agreements through “case-by-case” enforcement actions, said Victoria Graham, an FTC spokesperson.

The FTC is also considering appealing the court’s decision, Graham said.

The FTC voted in April to prohibit employers nationwide from entering into new noncompete agreements or enforcing existing noncompetes, saying the agreements restrict workers' freedom and suppress wages.

But companies opposing the ban argue they need noncompete agreements to protect business relationships, trade secrets and investments they make to train or recruit employees.

Apart from the Texas case, companies sued the FTC in Florida and Pennsylvania to block the rule.

In the Florida lawsuit, which was brought by a retirement community, the court granted a preliminary injunction, prohibiting enforcement of the rule just for the plaintiff, but not any other company.

In the Pennsylvania lawsuit, the court concluded that the plaintiff, a tree company, failed to show it would be irreparably harmed by the ban and that the company wasn’t likely to win the case.

The divergent rulings mean the issue could end up working its way to the U.S. Supreme Court.

A handful of Houston startups will be bouncing back and forth to Austin for the second annual MassChallenge Texas accelerator. Photo via Getty Images

Meta agrees to $1.4B settlement with Texas in privacy lawsuit over facial recognition

precedent

Meta has agreed to a $1.4 billion settlement with Texas in a privacy lawsuit over allegations that the tech giant used biometric data of users without their permission, officials said Tuesday.

Texas Attorney General Ken Paxton said the settlement is the largest secured by a single state. In 2021, a judge approved a $650 million settlement with the company, formerly known as Facebook, over similar allegations of users in Illinois.

“This historic settlement demonstrates our commitment to standing up to the world’s biggest technology companies and holding them accountable for breaking the law and violating Texans’ privacy rights,” Paxton, a Republican, said in a statement.

Meta said in a statement: “We are pleased to resolve this matter, and look forward to exploring future opportunities to deepen our business investments in Texas, including potentially developing data centers.”

Filed in 2022, the Texas lawsuit said that Meta was in violation of a state law that prohibits capturing or selling a resident's biometric information, such as their face or fingerprint, without their consent.

“This is by far the biggest state governmental privacy settlement in history,” Chicago-based class action attorney Jay Edelson said in an email. Edelson's firm filed the lawsuit that settled for $650 million with Meta. The only other larger claim is the Federal Trade Commission's $5 billion settlement with the company in 2019.

To date, Meta has now paid over $2 billion in settlements for biometric privacy claims, according to Edelson. “That is a huge signal to other companies that they should be extremely careful if they want to trade in individuals' biometric information,” he said.

The company announced in 2021 that it was shutting down its face-recognition system and delete the faceprints of more than 1 billion people amid growing concerns about the technology and its misuse by governments, police and others.

At the time, more than a third of Facebook’s daily active users had opted in to have their faces recognized by the social network’s system. Facebook introduced facial recognition more than a decade earlier but gradually made it easier to opt out of the feature as it faced scrutiny from courts and regulators.

Facebook in 2019 stopped automatically recognizing people in photos and suggesting people “tag” them, and instead of making that the default, asked users to choose if they wanted to use its facial recognition feature.

Texas filed a similar lawsuit against Google in 2022. Paxton’s lawsuit says the search giant collected millions of biometric identifiers, including voiceprints and records of face geometry, through its products and services like Google Photos, Google Assistant, and Nest Hub Max. That lawsuit is still pending.

The $1.4 billion is unlikely to make a dent in Meta’s business. The Menlo Park, California-based tech made a profit of $12.37 billion in the first three months of this year, Its revenue was $36.46 billion, an increase of 27% from a year earlier. Meta is scheduled to report its second-quarter earnings results on Wednesday.

Meta’s stock slipped $4.06 to $461.65 Tuesday, a decline of less than 1%.

You are more vulnerable to financial cyber threats in a crisis. Here are some tips for staying safe. Getty Images

Houston banking exec shares tips for keeping online information secure amid coronavirus threats

Guest column

While Houston residents are aware of the health and financial impacts of COVID-19, the threat to individual security due to the rise in online scams has only just begun.

Scammers have already started to prey on the unsuspecting victims who are now working, shopping and banking almost entirely online. A recent report by the Federal Trade Commission stated that due to the rise in online hacking and phishing scams, coronavirus-related frauds have already reached nearly $12 million in losses, impacting more than 15,000 Americans.

As individuals continue to become more and more dependent on technology during this extended time at home, it is important to be cautious and knowledgeable to avoid possible scams. Below are tips to consider when navigating coronavirus-related security threats.

Verify the URL

When dealing with financial matters, it is important to check the URL to ensure the site is secure and legitimate before clicking on a link provided by a third-party source or found within an email thread. Scan the link for misspellings and other abnormalities that appear to be out of place. It may also be helpful to visit the original website in a separate browser to compare the web addresses side by side. Illegitimate website links can lead to unsecure sites, viruses, and possible identity theft.

Check donation sources

Especially during this time, many Houstonians are donating to relief organizations working to fight the impacts of the coronavirus. Unfortunately, there are several faux fundraising campaigns claiming to support disaster relief, and the scammers behind these sites are preying on the goodwill of unsuspecting donors.

Consider supporting a charity that is well-known, transparent, and established, rather than a new organization with little history or information. Red flags may include sources requesting wire transfer information or a social security number, or charities applying pressure to donate immediately.

Guard financial information

It is especially important to guard financial information during this time to prevent identity theft. Many false stimulus check portals have surfaced online, encouraging visitors to provide personal information such as checking account details or credit card numbers.

The IRS encourages individuals to practice due-diligence and to be wary of details that may identify a scam. For example, noticing key words such as "Stimulus Check" or "Stimulus Payment" in place of the official term of economic impact payment.

If you have filed your taxes electronically, this payment will automatically be deposited into your bank account. For those who receive a check for the impact payment, it is important to remember that one of the best ways to protect financial assets is to be sure they are deposited in a reliable, federally insured bank account. Accounts are insured by the FDIC up to $250,000 per depositor, per insured bank, for each account ownership category, ensuring that your money is safe and protected.

Monitor accounts regularly

With the rise of online payments, it is important that individuals examine their accounts regularly to verify spending activity. While many assume that a scammer will take a large amount from a bank account, immediately triggering security functions and resulting in a text message to the account holder, this is not always the case.

Oftentimes, scammers will begin with smaller purchases, testing limits before stealing more. Additionally, it is important to check credit activity during this time to monitor for possible identity theft.

When it comes to making purchases and payments online, it is important to practice caution, even with sites that may appear to be trustworthy. By paying attention to the details and red flags that may signify a fraudulent site, individuals may be able to avoid online scams.

This is a time of great need. Unfortunately, it is also a time of great opportunity for criminals. As Houstonians respond, as they always do, be sure to protect yourself while you are helping our community.

------

Jay Rogers is the chairman and CEO of IBC Bank.

Ad Placement 300x100

Ad Placement 300x600

CultureMap Emails are Awesome

Property Showcase

Rice Alliance names Houston healthtech exec as first head of platform

new hire

The Rice Alliance for Technology and Entrepreneurship has named its first head of platform.

Houston entrepreneur Laura Neder stepped into the newly created role last month, according to an email from Rice Alliance. Neder will focus on building and growing Houston’s Venture Advantage Platform.

The emerging platform, which is being promoted by Rice Alliance and the Ion, aims to connect founders with the "people, capital and expertise they need to scale."

"I’ve spent a lot of time thinking about what it takes to make an innovation ecosystem more navigable, more connected, and more useful for founders," Neder said in a LinkedIn post. "I’m grateful for the opportunity to do that work at Rice Alliance, alongside a team with a long history of supporting entrepreneurship and innovation."

"Houston has the talent, institutions, and industry base to create real advantage for founders," she added. "I’m looking forward to listening, learning, and building stronger pathways across the ecosystem."

Neder most recently served as CEO of Houston-based Careset, where she helped bring the Medicare data startup to commercialization. Prior to that, Neder served as COO of Houston-based telemedicine startup 2nd.MD, which was acquired for $460 million by Accolade in 2021.

"Laura brings a rare combination of founder empathy, operational experience and ecosystem leadership," Rice Alliance shared.

Neder and Rice Alliance also shared that the organization is hiring developers to design the new Venture Advantage Platform. Learn more here.

Elon Musk's SpaceX files initial paperwork to sell shares to the public

Incoming IPO

Elon Musk's space exploration company has filed preliminary paperwork to sell shares to the public, according to two sources familiar with the filing, a blockbuster offering that would likely rank as the biggest ever and could make its founder the world's first trillionaire.

A SpaceX IPO promises to be one of the biggest Wall Street events of the year, with several investment banks lining up to help raise tens of billions to fund Musk's ambitions to set up a base on the moon, put datacenters the size of several football fields in orbit and possibly one day send a man to Mars.

The sources spoke on condition of anonymity because they were not authorized to talk publicly about the confidential registration with the Securities and Exchange Commission.

SpaceX did not respond immediately to a request for comment.

Exactly how much SpaceX plans to raise has not been disclosed but the figure is reportedly as much as $75 billion. At that level, the offering would easily eclipse the $29 billion that Saudi Aramco raised in its IPO in 2019.

The offering, coming possibly in June, could value all the shares of SpaceX at $1.5 trillion, nearly double what the company was valued in December when some minority owners sold their stakes, according to research firm Pitchbook, before an acquisition that increased its size.

Musk owns 42% of the SpaceX now, according to Pitchbook, though that figure will change with the IPO when new owners are issued shares. In any case, he is likely to pierce the trillion dollar mark because he is already close. Forbes magazine estimates Musk's net worth at roughly $823 billion.

In addition to making reusable rockets to hurl astronauts and hardware into orbit, SpaceX owns Starlink, the world’s largest satellite communications company. The company also recently brought under its roof two other Musk businesses, social media platform X, formerly Twitter, and artificial intelligence business, xAI, in a controversial transaction because both the seller and the buyer were controlled by him.

SpaceX has become the biggest commercial launch company in its industry, responsible for sending payloads into orbit for customers across the globe, but has also benefited from big taxpayer spending. That has raised conflicts of interest issues given that Musk was the biggest donor to President Donald Trump's campaign and is still a big backer.

In the past five years, SpaceX won $6 billion in contracts from NASA, the Defense Department and other U.S. government agencies, according to USAspending.gov.

Among current SpaceX owners is Donald Trump Jr, the president's oldest son. He owns a shares through 1789 Capital. That venture capital firm made him a partner shortly after his father won the presidency for a second time and has been buying up federal contractors seeking to win taxpayer money ever since.

The White House and Trump himself have repeatedly denied there are any conflicts of interest between his role as president and his family's businesses.

8+ can't-miss Houston business and innovation events in April

where to be

Editor’s note: Houston's weeklong innovation festival kicks off April, followed by Rice University's globally recognized pitch competition returning for its 26th year. Plus, find coworking pop-ups, industry meetups, pitch battles and even a crawfish boil on the calendar. Here’s what not to miss and how to register. Please note: this article might be updated to add more events.

March 30-April 4 — H-Town Roundup

Celebrate innovation, entrepreneurship and collaboration at Houston Exponential's sixth-annual H-Town Roundup. During the free event series, previously known as Houston Tech Rodeo, attendees can expect insightful talks, workshops and networking events at venues across the city.

This event began March 30. Register here.

April 2 — Industrious Coworking Day

Enjoy a complimentary day of cowering at Industrious and network with professionals at the Ion. Breakfast, snacks, wifi and workspace tours are included. Following the cowering day, Industrious will host happy hour at Second Draught from 4-6 p.m.

This event is Thursday, April 2, from 8:30 a.m.-5 p.m. at the Ion. Register here.

April 2 — Technology Summit for Women

The fourth annual Women in Tech Cummil will feature speakers across three core tracks: Transformation + Digital strategy, Cyber + Risk + Resilience, and AI in Practice. Pearl Chu, director of technical domains and university relations at SLB, will give the opening remarks. Other panelists come from CenterPoint Energy, BP, Technip Energies and other leading companies.

This event is Thursday, April 2, from 2-5 p.m. at the Ion. Register here.

April 8 — Veterans Business Battle

Hear pitches from veterans and entrepreneurs as they compete for more than $10 million in investments at Rice Businesses' 12th annual Veterans Business Battle. This year, the two-day event will also feature a Small Business Expo, which invites Houston-based, veteran-owned businesses to participate in education, networking and the opportunity to showcase their business. Moonshots Capital and Mercury Fund will also host a fireside chat.

This event begins Wednesday, April 8, at 11 a.m. at the Ion. Click here to register.

April 9-11 — Rice Business Plan Competition

The Rice Alliance for Technology and Entrepreneurship will host the 26th annual Rice Business Plan Competition this month. Forty-two student-led teams from around the world, including one team from Rice, will present their plans before more than 300 angel, venture capital, and corporate investors to compete for more than $1 million in prizes.

This event begins Thursday, April 9. Find more information here.

April 10 — BioHouston Chili Cookoff

Connect with Houston's life sciences community at BioHouston's 21st annual chili cookout. This event is geared toward startup founders, researchers and industry veterans alike.

This event is Friday, April 10, from noon-4 p.m. at Bayou City Event Center. Register here.

April 14 — Mercury Fund Day at the Ion: Agentic Commerce

Don’t miss the latest installment of Mercury Fund Day at the Ion, previously known as Software Day. The recurring monthly event features office hours (by application), a keynote and networking opportunities. This month's topic focuses on agentic commerce.

This event is Tuesday, April 14, from 3:30-7 p.m. at the Ion. Register here.

April 19 – UH Energy Industry Crawfish Boil

Head to the UH Cullen College of Engineering Green Space for the 35th annual UH Energy Industry Crawfish Boil. The event will include a student showcase, STEM activities, a kids zone, live music, networking and, of course, crawfish. Proceeds from the event will support the multidisciplinary capstone fund that aims to increase professional readiness for Cullen College engineering and technology students.

This event is Sunday, April 19, from 1-5 p.m. at the Cullen College of Engineering Green Space. Find more information here.

April 24 — Rice Business Healthcare Conference

Leading experts, innovators and the next generation of healthcare leaders will converge at the Rice Business Healthcare Conference. Hosted by the Rice Business Healthcare Association, the conference will explore AI's potential impact on the sector.

This event is Friday, April 24, from 8 a.m.-2 p.m. at McNair Hall on Rice University's campus. Find more information here.

View All Listings

INNOVATIONMAP EMAILS ARE AWESOME