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The US Chamber of Commerce and organizations representing a wide range of US businesses have filed a lawsuit against the Federal Trade Commission (FTC) after a contentious vote to ban noncompete agreements.
On Tuesday, the FTC decided with a 3-2 vote to prohibit these agreements, necessitating the dismantling of existing noncompete clauses and informing workers that they will no longer be enforced. This decision has exemptions for senior executives, who can still be required to agree to a noncompete clause.

Business groups, including the Chamber, argue that noncompete clauses are vital for protecting proprietary information and employee investments. In legal documents, the Chamber, Business Roundtable, and Texas Association of Business argued that “these agreements benefit employers and workers alike—the employer protects its workforce investments and sensitive information, and the worker benefits from increased training, access to more information, and an opportunity to bargain for higher pay.” They also criticized the FTC’s decision, saying it was beyond their scope and a complete “overreach.”
Chamber President and CEO Suzanne Clark has defended traditional business practices, stating, “Since its inception over 100 years ago, the FTC has never been granted the constitutional and statutory authority to write its own competition rules. Noncompete agreements are either upheld or dismissed under well-established state laws governing their use.” She added that the recent decision by “three unelected commissioners” to ban noncompetes could undermine valid business decisions across all sectors.
Another view:
According to the FTC, eliminating these agreements could increase worker earnings by an estimated $488 billion over the next ten years and facilitate the creation of over 8,500 new businesses annually. FTC Chair Lina Khan argued that noncompete clauses “restrict workers” opportunities and “infringe” on their ability to change jobs and employers. She also said it was “Robbing people of their economic liberty also robs them of all sorts of other freedoms, chilling speech, infringing on their religious practice, and impeding people’s right to organize.”