U.S. Chamber of Commerce threatens to sue the FTC over proposed ban on noncompete clauses

Leading business advocacy groups have pledged to sue the Federal Trade Commission if it acts on a proposal to ban non-compete clauses in worker contracts.

The U.S. Chamber of Commerce, which represents about 3 million businesses, is ready to sue if the FTC continues to push for proposals that would bar companies from imposing non-compete clauses on their employees, said president and CEO Suzanne. P. Clark told reporters on Thursday. The organization is the largest business industry group in the United States, and she spent nearly $60 million lobbying lawmakers in her first three quarters of last year, according to Open Secrets, a nonpartisan campaign finance watchdog. .

Chamber of commerce called proposal It is “blatantly illegal” and ignorant of established state law that “non-compete agreements are an important tool in promoting innovation and sustaining competition.” raise wages Workers lose about $300 billion a year, according to the FTC.

The organization has also committed to lobbying Congress to limit some of the FTC’s regulatory activities through the appropriation process, said Neil Bradley, executive vice president, chief policy officer and strategic advocacy officer at the U.S. Chamber of Commerce. said.

Banning non-compete agreements was “clearly a power[that the FTC doesn’t have]that no one thought they had,” Bradley said. “These are the things we can build bipartisan agreements to force appropriators to limit their powers.”

Bradley said the FTC’s premise that anti-competitive conduct could be eliminated under Section 5 of the FTC Act, which prohibits unfair methods of competition, is not considered possible by most legal experts.

“This is why the states regulate it. And until Congress changes that, if… you believe in the rule of law, it’s really important that at least federal agencies abide by the law.” And this is not legal, you can write it any way you want,” said Bradley.

Lifting non-compete obligations could threaten business innovation by jeopardizing “confidentiality” between former employees who freely move to another company, Clark said. increase.

The U.S. Chamber of Commerce is no stranger to challenging federal agencies that they feel have exceeded their powers in court.filed a lawsuit against FTC not only in the past year, Securities and Exchange Commission and the Consumer Financial Protection Bureau.

But its mission to counter the FTC’s authority could face an uphill battle in the House. The House has fallen out of favor with Republican leadership, including new House Speaker Kevin McCarthy, a California Republican, after endorsing a so-called wake-up policy. Last summer, McCarthy said he wouldn’t even meet with the group if he won the speaker’s seat. According to Axios.

Proposals to ban non-compete have also been taken up in the Senate.Ah Specification The bill, which was proposed by Senator Chris Murphy (D-Connecticut) to eliminate them under certain conditions in 2021, was signed by Republican co-sponsors Senator Todd Young of Indiana and North Dakota’s It drew bipartisan support from Senator Kevin Cramer.

At the time, Young said lifting the non-compete clause would give Americans “maximum flexibility to find and secure employment” during the pandemic.

“Non-compete agreements stifle wage growth, career progression, innovation and business creation,” he said.

Bradley said working with Congress to limit the FTC’s powers would be a ‘tough task’ for the president Joe Biden During his tenure, Democrats control the Senate.

“We’re going to work from every angle to make sure we don’t budget every egg…basket,” he said. “We are already in litigation and he will continue to file lawsuits against the FTC.”