Business Groups Challenge FTC’s Ban on Noncompete Agreements for 30 Million Workers: Employer-Worker Benefits, Lack of Congressional Authorization Spark Legal Action Backed by Biden and Gaetz

After the Federal Trade Commission (FTC) voted in favor of banning new noncompete agreements for around 30 million workers on Tuesday, business groups and the United States Chamber of Commerce took action. A lawsuit was filed by these organizations, including Business Roundtable and Texas Association of Business, as well as Longview Chamber of Commerce, to stop this ban on noncompete clauses. The plaintiffs argued that such agreements benefit both employers and workers since they safeguard investment in the workforce while also providing increased training, access to information, and opportunities for higher pay. They further stated that no authorizing legislation has been passed by Congress regarding national rules governing these contracts, which have never received a committee vote or approval from either house of Congress before. The FTC’s decision was set to come into effect 120 days after the ruling but is now delayed due to legal challenges. President Joe Biden previously expressed his support for this move made by the FTC. Rep. Matt Gaetz (R-FL) also praised the FTC’s action, stating that it upholds economic freedom and free enterprise in a rare agreement with Biden’s administration on X.