The US Chamber of Commerce and other trade groups have filed a lawsuit against the US Federal Trade Commission following the regulator’s decision to ban non-compete agreements. The coalition, which includes the Business Roundtable, Texas Association of Business, and Longview Chamber of Commerce, argues that the ban will harm their ability to protect confidential information and investments in the workforce. They are seeking to have the rule voided and prevent the FTC from enforcing it.
The FTC voted 3-2 to approve the rule, which bans most non-compete contracts that restrict workers from leaving for a competitor for a set period and in a specific geographic region. The regulator contends that their legal authority is clear and that addressing non-competes falls within their mandate. This legal battle between the regulator and business groups is likely to continue for months, leaving employers uncertain about the future of non-compete agreements.
The Chamber of Commerce has been a vocal critic of the FTC’s move to ban non-compete agreements, arguing that they are governed by well-established state laws, not federal regulation. The FTC estimates that around 30 million workers in the US are currently bound by non-compete contracts, impacting not only high-level executives but also hourly employees such as bartenders and security guards. The outcome of this legal battle will have significant implications for the American workforce.
