EMA Joins Chamber in Opposing Ban on Noncompete Clauses

This week, EMA joined other members of the Chamber of Commerce in sending a letter to all Members of Congress. The letter is in opposition to the Federal Trade Commission’s (FTC) proposed rule to impose a nationwide ban on almost all noncompete clauses. The FTC lacks the constitutional or statutory authority to issue such a rule and, in attempting to do so, the agency is improperly usurping the role of Congress. Moreover, this sweeping rule would invalidate millions of contracts around the country that courts, scholars, and economists have found entirely reasonable and beneficial for both businesses and employees. Therefore, we asked Members of Congress to exercise their oversight and appropriations authority to closely examine the FTC’s proposed rulemaking.

Congress never granted the FTC the statutory authority to issue rules regulating competition, such as the contractual relationship between employers and employees. Rather, Congress granted targeted statutory authority to FTC to issue rules to protect consumers, such as to prevent fraud and false advertising. In the past, Congress curbed FTC’s excesses with appropriations riders, and we encouraged Congress to revisit such tools today. The Supreme Court recently recognized the important Constitutional limitations on the ability of executive agencies to issue major rules such as that proposed here without clear guidance from Congress.

Click here to read the letter.