Top Senate Democrats press Chamber of Commerce on threat to sue FTC over noncompete clause ban

WASHINGTON — Two apical Senate Democrats connected Tuesday volition property the largest U.S. concern advocacy enactment connected its menace to writer the Federal Trade Commission implicit a program to prohibition noncompete clauses.

Sens. Elizabeth Warren, D-Mass., and Sheldon Whitehouse, D-R.I., are requesting elaborate accusation from the U.S. Chamber of Commerce astir its program to writer the FTC to halt the proposal. The monolithic lobbying enactment represents astir 3 cardinal businesses.

"The Chamber's statement of noncompete agreements arsenic a instrumentality for 'fostering innovation and preserving competition' is demonstrably false, and represents precisely the benignant of Washington insider doublespeak that large concern has been utilizing for years to warrant anti-worker and anticonsumer policies," the missive from the senators addressed to Chamber of Commerce CEO Suzanne Clark volition state.

"Noncompete agreements are ineligible contracts prohibiting workers from taking akin positions with caller employers oregon starting their ain businesses," Warren, who sits connected the Senate Banking Committee, and Whitehouse, a subordinate of the Senate Finance and Budget committees, volition write.

The FTC has said that noncompete clauses, which impact 1 successful 5 American workers, interruption the agency's just commercialized laws by preventing workers from starting a occupation astatine a competing concern until a definite magnitude of clip has passed. The bureau has called the agreements, usually entered into erstwhile workers commencement a caller occupation astatine a company, exploitative.

The caller regularisation that would barroom employers from imposing noncompete clauses could increase workers' wages by $300 cardinal a year, according to the FTC.

Noncompete clauses are already banned successful astatine slightest 10 states. A prohibition successful Oregon helped rise wages for little wage workers by 2% to 3%, according to a 2021 study.

But the Chamber has called the connection "blatantly unlawful." In a connection released soon aft the FTC announced the connection successful aboriginal January, the enactment argued Congress has not fixed the bureau the authorization to marque the regularisation change.

Clark announced successful January the enactment volition sue to reason the projected regulation. The Chamber CEO reiterated her presumption respective days aboriginal successful an op-ed successful The Wall Street Journal.

In the op-ed, Clark said the FTC's intent to trigger Section 5 of the FTC Act to prohibition unfair methods of contention undermines its committedness to "preserving innovation successful a escaped market." As written, Section 5 prohibits ''unfair oregon deceptive acts oregon practices successful oregon affecting commerce'' for everyone engaged successful commerce, including banks, according to the Consumer Compliance Handbook.

Warren and Whitehouse's missive to Clark volition situation that view.

"This assertion is absurd," the senators volition say. "These noncompetes bash thing but stifle contention for workers, businesses seeking to prosecute them, and entrepreneurs starting their ain businesses."

To warrant the agency's oversight, the senators volition notation a November 2022 policy statement connected Section 5 that identifies the FTC's authorization implicit "coercive, exploitative, collusive, abusive, deceptive, predatory" behaviour that goes beyond competition.

Warren and Whitehouse volition besides contend that banning noncompete clauses is really amended for businesses. They volition constitute that the agreements depress wages, forestall marketplace maturation and unit employees into worse jobs oregon retired of the workforce altogether.

"Notwithstanding the Chamber's doomsday predictions and threats to writer to overturn the law, the FTC's projected regularisation would assistance workers, tiny businesses, and the full economy, and the bureau has the ineligible close to enforce this rule," the senators volition say.

Warren and Whitehouse volition contented an end-of-February deadline for the Chamber to supply details connected its determination to reason the noncompete rule, outline immoderate fundraisers who person contributed to its efforts to combat the connection and item which of its members usage noncompete agreements.