Business groups are challenging a new rule that prohibits the use of noncompete agreements, arguing that these agreements are necessary to safeguard intellectual property and protect workers. The Chamber, Business Roundtable, Texas Association of Business, and Longview Chamber of Commerce have filed a lawsuit against the Federal Trade Commission (FTC) in the U.S. District Court for the Eastern District of Texas.
The legal action follows recent 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.
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 FTC contends that banning noncompete agreements will enable approximately 30 million Americans, equivalent to 18 percent of the U.S. workforce, to seek new job opportunities within their industry and potentially earn higher incomes.
The outcomes of these legal battles may not be determined until after President Biden’s term ends in 2024 or if he is reelected for another term. However, they highlight a notable difference in approach between him and potential Republican candidate, former President Trump