Chamber, business groups sue FTC to block noncompete ban [Video]

Business groups led by the U.S. Chamber of Commerce sued the Federal Trade Commission (FTC), challenging its decision to ban noncompete agreements.

The FTC voted 3-2 Tuesday to pass the rule blocking new noncompete agreements. The rule also requires employers to throw out existing noncompete agreements and notify current and former workers they won’t be enforced, though the final rule carved out an exemption for senior executives, who still may be subject to the agreement.

The agency says the noncompete ban will allow 30 million people, around 18 percent of the U.S. workforce, to change jobs within their industry and earn more money. 

But business groups say noncompete agreements are necessary to protect intellectual property and accuse the FTC of regulatory overreach.

“These agreements benefit employers and workers alike—the employer protects its workforce investments and sensitive information, and the worker benefits from increased training, access to more information, and an opportunity to bargain for higher pay,” the plaintiffs wrote in the lawsuit.

“Although some Members of Congress have recently taken an interest …