04/24/2024

Groups Sue to Block FTC’s New Rule Barring Noncompete Agreements

The U.S. Chamber of Commerce is leading the charge

On Wednesday, the U.S. Chamber of Commerce and other business groups sued the Federal Trade Commission (FTC) over a new rule that would make most noncompete agreements illegal, setting up a potential showdown over the scope of a federal agency’s authority.

The lawsuit, filed in a federal court for the Eastern District of Texas, comes a day after the FTC voted 3-2 to issue a rule that bans noncompete agreements, clauses that restrict workers from switching employers within their industry. The agency estimates some 30 million workers are bound by the agreements. Proponents of the FTC’s new rule have argued that it would buoy wages and free up labor markets.

But the chamber argues in its lawsuit that the agency lacks the authority to issue such a sweeping and consequential rule, and it is asking the court to overturn it.

Please select this link to read the complete article from The Washington Post.