The FTC Is Banning Noncompetes. The Business Lobby Isn't Happy.
HuffPost
The U.S. Chamber of Commerce immediately challenged the agency's new ban, filing a lawsuit in the conservative 5th Circuit.
Business groups that represent employers are not pleased with the Federal Trade Commission’s new ban on noncompete agreements and have already gone to court seeking to block it.
The U.S. Chamber of Commerce, joined by the Business Roundtable and the Texas Association of Business, filed a lawsuit Wednesday in federal court in Texas arguing that the FTC has overstepped its legal authority in issuing the rule. The commission, which enforces antitrust law, finalized the historic new regulation in a 3-2 vote the previous day.
Noncompete agreements forbid workers from taking jobs at competing businesses for a certain period of time, effectively locking workers into their current positions. It’s only logical for business groups to be upset with the FTC; banning noncompetes would shift more bargaining power to workers, forcing employers to improve wages and working conditions or risk losing talent to their competitors.
The FTC said that the rule would go into effect 120 days after it appears in the Federal Register. The Chamber could ask a judge to grant an injunction to stop the noncompete rule from taking effect while the case is being litigated.
Conservative groups often choose to mount their challenges to progressive federal policies in Texas, where they’re more likely to find a judge who shares their dislike for the regulatory state — a legal practice called “forum shopping.” The Chamber filed its lawsuit in Texas’ Eastern District, which falls under the U.S. Court of Appeals for the 5th Circuit, considered the most right-wing of the federal circuits and a place where regulations go to die.
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