Via The U.S. Chamber of Commerce
The Chamber chalked up a victory for American businesses, workers, and the economy when a federal court blocked the Federal Trade Commission (FTC) from implementing a nationwide ban on employer noncompete agreements.
Why it matters: Noncompetes are important to fostering innovation and promoting competition. With a ban, employees could have seen fewer opportunities and reduced investments in their education, training, and development.
Our take: “This decision is a significant win in the Chamber’s fight against government micromanagement of business decisions. A sweeping prohibition of noncompete agreements by the FTC was an unlawful extension of power that would have put American workers, businesses, and our economy at a competitive disadvantage,” said Chamber President and CEO Suzanne P. Clark.
- “We remain committed to holding the FTC — and all agencies — accountable to the rule of law, ensuring American workers and businesses can thrive.”
What happened: On April 23, the Chamber sued the FTC over its ban.
- On July 3, the U.S. District Court for the Northern District of Texas granted the Chamber’s motion for preliminary injunction.
- On August 20, the court granted the Chamber’s motion for summary judgment holding that the FTC's rule “shall not be enforced or otherwise take effect,” because “the FTC lacks substantive rulemaking authority with respect to unfair methods of competition.”
Big picture: This is the seventh major legal victory the Chamber has secured in its opposition to the government micromanagement of business:
- In May 2024, the Chamber won a preliminary injunction against the CFPB’s credit card late fees rule.
- In March 2024, the Chamber won its challenge against the NLRB’s joint employer rule.
- In March 2024, the Chamber won its challenge against the prudential bank regulators’ Community Reinvestment Act rule.
- In December 2023, the Chamber won its challenge against the SEC’s stock buyback rule.
- In September 2023, the Chamber won its challenge against the CFPB’s Unfair, Deceptive, or Abusive Acts or Practices section of its exam manual.
- In May 2023, the Chamber won a stay against the EPA’s Waters of the United States Rule.
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