The US Chamber will file a lawsuit Wednesday against the Federal Trade Commission (FTC) after the agency voted to ban employer noncompete agreements. The FTC’s action sets a dangerous precedent for government micromanagement and will harm employees, employers, and the economy.

Why it matters: The US Chamber continues fighting back against government micromanagement.

The FTC contends that by using regulation they can simply declare common business practices to be “unfair methods of competition” and thus illegal. This is despite the fact that noncompete agreements have been around longer than the 110-year-old FTC and until now no one has suggested that they are illegal.

• Challenging the FTC in court is about more than noncompete agreements. It is about stopping an astonishing power grab by the FTC.
• If the FTC can regulate noncompete agreements, then they can decide to regulate or even ban any other business practice. All without a vote from Congress.
• Be smart: Noncompete agreements can be useful for businesses and employees. They protect investments in research and development and promote workforce training.

US Chamber’s Take: “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,” said U.S. Chamber President and CEO Suzanne P. Clark. “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.”

Big picture: Businesses face a regulatory onslaught as federal agencies pursue aggressive policy changes through regulation, preventing them from innovating, growing, and hiring. They need clear rules so they can focus on serving their customers and supporting their communities instead of navigating a maze of extraneous rules and regulations.

Bottom line: If the FTC can ban noncompete agreements, then what is next?

Dig Deeper: Why the US Chamber Challenges Regulatory Threats

If you have any questions please reach out to Andy Wilke, Executive Vice President, Greater Mankato Growth.

Greater Mankato Growth is a member of the US Chamber of Commerce. Our local advocacy work with the US Chamber is “ala carte” – we support the US Chamber’s overall advocacy efforts and engage on specific issues that compliment GMG’s policy priorities, adopted annually by the GMG Board of Directors.