The Chamber of Commerce Will Battle the FTC

FTC Chairwoman Lina Khan testifies throughout the Home Appropriations Subcommittee in Washington, Might 18, 2022.


Tom Williams/Zuma Press


Lina Khan

assumed the chairmanship of the Federal Commerce Fee, she stated her aim was to “form the distribution of energy and alternative throughout our economic system.” Her proposed ban on all employment-based noncompete agreements suggests she doesn’t intend to let the legislation or Structure get in her manner.

The U.S. Chamber of Commerce will oppose the proposed regulation with all of the instruments at our disposal, together with litigation. If the FTC can regulate noncompete agreements with out authorization from Congress, there isn’t a side of employment or industrial preparations that it doesn’t have the authority to manage or ban arbitrarily.

In its greater than 100-year historical past, the FTC has by no means enforced a rule to manage competitors, and Congress by no means meant the company to have that energy. As an alternative, legislators gave the FTC authority to establish on a case-by-case foundation particular person acts that represent unfair competitors. Critically, this authority is topic to judicial oversight.

This construction has been a key to preserving innovation in a free market and avoiding overregulation. It prevents the FTC from writing the legal guidelines it’s assigned to implement, which is important to guard the constitutional separation of powers.

But the current FTC isn’t content material to stay underneath the authorized strictures imposed by elected representatives and the Structure. Earlier than issuing the proposed noncompete ban, the FTC issued a radical reinterpretation of the company’s authority underneath Part 5 of the Federal Commerce Fee Act, which governs “unfair strategies of competitors.” This implies the FTC is strolling away from having to weigh client advantages in opposition to client harms and even establish precise hurt to customers. In her dissent, FTC Commissioner

Christine Wilson

slammed the brand new guidelines for giving the company “authority summarily to sentence primarily any enterprise conduct it finds distasteful.”

The proposed regulation to ban noncompetes takes this one step additional. Fairly than reviewing and judging the particular and particular person conduct of firms underneath Part 5, the FTC has proposed merely to situation a nationwide ban of a sort of employment contract that three unelected commissioners have determined they don’t like.

The minds of progressive activists should be operating wild with concepts of what they may do if this method is allowed to face. Don’t just like the pay hole between executives and nonexecutives? The FTC might merely declare it unfair and regulate it. Suppose that companies above a sure measurement shouldn’t be allowed to get any greater via mergers? The FTC might merely declare these companies can’t make acquisitions.

Sound far-fetched? Just like the banning of noncompetes, each of those insurance policies have been put ahead by Sens.

Bernie Sanders


Elizabeth Warren.

This combat is about far more than the destiny of noncompete agreements. That’s why the Chamber of Commerce will combat in court docket to carry the FTC accountable to the rule of legislation.

Ms. Clark is president and CEO of the U.S. Chamber of Commerce.

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