The US Chamber of Commerce is threatening to sue the Federal Trade Commission over its proposed ban on incomplete clauses

Signs are seen at the Chamber of Commerce building in the Manhattan borough of New York City, New York, US, April 21, 2021.

Andrew Kelly | Reuters

A large business advocacy group has vowed to sue the Federal Trade Commission if it acts on a motion to ban incomplete clauses in workers’ contracts — an issue that has bipartisan support among lawmakers.

President and CEO Susan B. Clark told reporters Thursday that the US Chamber of Commerce, which represents about 3 million companies, is prepared to sue if the FTC continues to push for a proposal that would prohibit companies from imposing incomplete terms on employees. The organization is the largest US trade group and spent nearly $60 million lobbying lawmakers during the first three quarters of last year, according to Open Secrets, an organization that monitors nonpartisan campaign finance.

the room motion called “blatantly illegal” and ignoring well-established state laws where “non-competitive agreements are an important tool in promoting innovation and maintaining competition”. It is likely to change wage increase About $300 billion annually to workers, according to the Federal Trade Commission.

The organization also pledged to pressure Congress to curtail some of the FTC’s regulatory activities through the appropriations process, said Neil Bradley, executive vice president, chief policy officer and head of US Chamber’s strategic advocacy.

Banning incomplete agreements, Bradley said, “is clearly a power that[the Federal Trade Commission]does not have and no one thought they had.” “These are the things we can try to forge a bipartisan agreement on to get appropriation writers to limit power.”

Bradley said the agency’s premise — that it can eliminate noncompetes under Section 5 of the FTC statute, which prohibits unfair competition tactics — is something most legal observers don’t think is possible.

“That’s why states regulate it. And until Congress changes that, it really matters if … you believe in the rule of law, at least federal agencies are abiding by the law. That’s not abiding by the law,” Bradley said, no matter how you write it.

Raising the number of non-competitors could also threaten business innovation by jeopardizing “confidentiality” among former employees who move freely to another company, Clark said.

The US Chamber is no stranger to challenging federal agencies that it feels have overstepped its authority in court. A lawsuit has been filed against FTC Last year, as well Securities and Exchange Commission and the Consumer Financial Protection Bureau.

But her mission to counter the FTC’s power could face an uphill battle in the House of Representatives as the chamber has fallen out of favor with the Republican leadership, including new House Speaker Kevin McCarthy, R-Calif., after it supported so-called wake-up policies. Last summer, McCarthy said he wouldn’t even meet the group if he won the hearing, According to Axios.

The proposal to ban non-competitors has also been discussed before in the Senate. a invoice It was introduced by Sen. Chris Murphy, D-Conn., in 2021 to eliminate it under certain conditions. It has attracted bipartisan support, Sens. Todd Young of Indiana and Kevin Kramer of North Dakota.

At the time, Young said eliminating incomplete clauses would provide Americans with “maximum flexibility to find and secure work” during a pandemic.

“Non-compete agreements stifle wage growth, career advancement, innovation and business creation,” he said.

Bradley said working with Congress to limit the FTC’s powers will be a “daunting challenge” with the president Joe Biden In office and with the Democrats controlling the Senate.

“We’re going to work around all corners, we’re not putting all our eggs in the appropriations…basket,” he said. “We are already in a lawsuit, and will be in a future lawsuit against the FTC.”

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