US Chamber of Commerce sues FTC over noncompete ban [Video]

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. 

The Chamber said after the FTC’s 3-2 vote, which advanced with the support of the agency’s majority Democratic commissioners, that there are already legal frameworks for determining whether a given noncompete should be upheld or dismissed, and would undermine American businesses’ competitiveness.

The FTC on Tuesday released its final regulation banning noncompete agreements, which prohibit an employee from leaving their current company to work for a competitor and are more commonly used in more senior positions — though some retail and food service companies have also applied them to lower-level workers as well.

FTC VOTES TO BAN NONCOMPETE AGREEMENTS

The rule, which takes effect in August, bans all new noncompetes as an unfair competitive practice. …