The U.S. Chamber of Commerce on Wednesday filed a lawsuit against the Federal Trade Commission (FTC) over the agency’s ban on noncompete agreements.
In the lawsuit, which was filed in federal court in Tyler, Texas, the Chamber argues that the FTC lacked the constitutional and statutory authority to advance the sweeping regulation.
FTC VOTES TO BAN NONCOMPETE AGREEMENTS The rule, which takes effect in August, bans all new noncompetes as an unfair competitive practice.
U.S. Chamber of Commerce CEO Suzanne Clark said in a statement after the FTC’s vote Tuesday that the “decision to ban employer noncompete agreements across the economy is not only unlawful but also a blatant power grab that will undermine American businesses’ ability to remain competitive.”
FTC VOTES TO BAN NONCOMPETE AGREEMENTS “Since its inception over 100 years ago, the FTC has never been granted the constitutional and statutory authority to write its own competition rules.
Noncompete agreements are either upheld or dismissed under well-established state laws governing their use,” Clark said.
“Yet, today, three unelected commissioners have unilaterally decided they have the authority to declare what’s a legitimate business decision and what’s not by moving to ban noncompete agreements in all sectors of the economy,” she added.
LAWMAKER DEMANDS FTC PROBE TEMU PARENT COMPANY OVER ALLEGED CCP TIES FTC spokesman Douglas Farrar told FOX Business in a statement, “Our legal authority is crystal clear.
The US. S. The Federal Trade Commission (FTC) was sued on Wednesday by the Chamber of Commerce due to the FTC’s prohibition on noncompete agreements.
The Chamber contends that the FTC lacked the constitutional and statutory authority to advance the comprehensive regulation in the lawsuit, which was filed in federal court in Tyler, Texas.
Following the FTC’s 3-2 decision, which was supported by the majority Democratic commissioners in the agency, the Chamber stated that the competitiveness of American businesses would be weakened and that there are already legal frameworks in place for deciding whether a particular noncompete should be upheld or dismissed.
Noncompete agreements, which forbid an employee from joining a rival company and are typically utilized in higher-level roles, were officially outlawed by the FTC on Tuesday. However, some retail and food service establishments have also implemented them for lower-level employees.
The FTC votes to outlaw noncompliant contracts.
All new noncompetes are prohibited by the rule, which becomes operative in August, as unfair competition practices. Senior executives—defined by the FTC as employees in a “policy-making position” who make over $151,164 annually—would not have their existing noncompetes terminated; instead, they would continue to apply to them, but noncompetes for other employees would no longer be enforceable.
You. s. “Decision to ban employer noncompete agreements across the economy is not only unlawful but also a blatant power grab that will undermine American businesses’ ability to remain competitive,” stated Chamber of Commerce CEO Suzanne Clark in a statement following the FTC’s vote on Tuesday. “.
The FTC votes to outlaw noncompliant contracts.
Since its establishment more than a century ago, the Federal Trade Commission (FTC) has never been given the constitutional or statutory authority to create its own competition regulations. Well-established state laws controlling the use of noncompete agreements either uphold or reject them, according to Clark.
“However, by attempting to outlaw noncompete agreements across the board, three unelected commissioners have unilaterally determined they possess the power to determine what constitutes a lawful business decision and what does not,” the speaker continued.
TEMU PARENT COMPANY DEMANDS FTC INQUIRY ABOUT ALLEGED CCP TIES.
In a statement to FOX Business, FTC spokesman Douglas Farrar said, “Our legal authority is crystal clear.”. With the FTC Act, Congress explicitly gave the FTC the authority and direction to “make rules and regulations for the purposes of carrying out the provisions of” the Act as well as to prohibit “unfair methods of competition.”. “.
“Courtes have upheld this authority multiple times, and Congress has reiterated it. We look forward to succeeding in court because our mission is to address noncompetes that restrict Americans’ economic freedom,” Farrar continued.
In response to tax service company Ryan LLC’s Tuesday filing of the first legal challenge against the FTC rule in a separate federal court in Texas, the Chamber is expected to file several lawsuits against the rule.
