Noncompete Agreement Battle: FTC vs. Business Groups on Regulatory Boundaries; Legal Challenge by Chamber, Business Roundtable and others Follows Anti-consumer Bureau Lawsuit; Presidential Candidates Take Different Stances on Workforce Protection.

New noncompete agreements are being challenged by business groups who argue that they are necessary to safeguard intellectual property. The Federal Trade Commission (FTC) is accused of overstepping its regulatory boundaries by prohibiting the use of these agreements. A lawsuit has been filed against the FTC in the U.S. District Court for the Eastern District of Texas by the Chamber, Business Roundtable, Texas Association of Business, and Longview Chamber of Commerce.

Noncompete agreements benefit both employers and workers by protecting investments in the workforce and sensitive information while providing employees with increased training, access to more information, and the opportunity to negotiate higher pay. The legal action follows recent legal challenges by the Chamber against the Consumer Financial Protection Bureau over a new rule that would limit credit card late fees imposed by major issuers to $8, a significant reduction from the average $32 late fee. The Chamber alleges that the bureau exceeded its authority in issuing the rule.

The outcomes of these legal battles may not be determined until after the 2024 presidential election. However, they highlight a notable difference in approach between President Biden and potential Republican candidate, former President Trump. While President Biden supports a ban on noncompete agreements as part of his economic agenda to promote competition and worker rights, former President Trump has expressed support for these agreements as a way to protect businesses’ investments in their employees.

For more information on these developments, refer to Taylor Giorno’s coverage on The Hill.