To the Members of the United States Congress:
On behalf of the undersigned organizations and our members across the country, we write to unequivocally oppose 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. Accordingly, we ask you to exercise your 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, which even advocates for action in this area, like Sen. Chris Murphy (D-CT), recognize.[i] Rather, Congress granted targeted statutory authority to FTC to issue rules to protect consumers, such as to prevent fraud and false advertising. The FTC’s authority with respect to competition issues is limited to adjudicating individual cases where competition issues are involved where the FTC must consider the factual context and reasonableness of conduct in each such matter.
The FTC has not attempted to promulgate a competition rule for decades, across administrations of both parties. In the past, Congress curbed FTC’s excesses with appropriations riders, and we encourage 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. Two years ago in AMG Capital Management v. FTC, for example, the Supreme Court unanimously rejected the FTC’s claims that it could interpret its own statutes to claim broad authority. In cases involving other agencies, courts have invoked the major questions and non-delegation doctrines to strike down agency excesses and to preserve the role of elected officials in addressing important issues. We urge Congress to reassert its Constitutional role to resolve issues of national importance and limit attempts to usurp this authority through unauthorized regulatory overreach.
Finally, the FTC’s blanket ban on noncompete clauses is vastly overbroad and likely will harm both employees and employers. Courts, scholars, and economists all have found that noncompete clauses, when properly used, encourage investment in employees and help to protect intellectual property. Forty-seven states permit noncompete clauses, which have traditionally been an issue of state law.
To be sure, courts do not and should not enforce unreasonably restrictive noncompete clauses, but therein lies the wisdom of our current system: reasonable, procompetitive noncompetes stand, whereas unreasonable, anticompetitive ones fall.
We thank you for your attention to this issue and we ask you to exercise your oversight and appropriations authority to rein in FTC’s unauthorized rulemaking banning noncompete agreements.
Sincerely,
National
ACA International
ACT | The App Association
Advanced Medical Technology Association
Aerospace Industries Association
Alternative Investment Management Association
American Bakers Association
American Beverage
American Coatings Association
American Financial Services Association
American Hotel & Lodging Association
American Property Casualty Insurance Association
American Staffing Association
American Trucking Associations
ANA - Association of National Advertisers
Associated Builders and Contractors
Associated Equipment Distributors
Computer and Communications Industry Association
Consumer Brands Association
Consumer Technology Association
Council of Insurance Agents and Brokers
Direct Selling Association
Electronic Transactions Association
Energy Marketers of America
Federation of American Hospitals
FIA Principal Traders Group
FMI - The Food Industry Association
Foodservice Equipment Distributors Association
Heating, Air-Conditioning, & Refrigerant Distributors International
HR Policy Association
Independent Electrical Contractors
Independent Insurance Agents & Brokers of America
Independent Lubricant Manufacturers Association
International Franchise Association
International Sign Association
ISSA, The Worldwide Cleaning Industry Association
Littler Mendelson Workplace Policy Institute
Medical Alley Association
Metals Service Center Institute
Mortgage Bankers Association
National Association of Benefits and Insurance Professionals
National Association of Broadcasters
National Association of Convenience Stores
National Association of Electrical Distributors
National Association of Insurance and Financial Advisors
National Association of Mutual Insurance Companies
National Association of Professional Employer Organizations
National Association of Security Companies
National Association of Wholesaler-Distributors
National Council of Chain Restaurants
National Federation of Independent Business
National Independent Automobile Dealers Association (NIADA)
National Mining Association
National Newspaper Association
National Pest Management Association (NPMA)
National Propane Gas Association
National Restaurant Association
National Retail Federation
National Truck Equipment Association
National Waste & Recycling Association
Reinsurance Association of America
Retail Industry Leaders Association (RILA)
Securities Industry and Financial Markets Association
SIFMA Asset Management Group
U.S. Chamber of Commerce
Wholesale & Specialty Insurance Association (WSIA)
Alabama
Mobile Area Chamber of Commerce
Prattville Area Chamber of Commerce
Selma and Dallas County Chamber of Commerce and Tourism Information
Alaska
Alaska Chamber of Commerce
Arizona
Apache Junction Area Chamber of Commerce
Arizona Chamber of Commerce & Industry
Arizona Manufacturers Council
Buckeye Valley Chamber of Commerce
Chandler Chamber of Commerce
Gilbert Chamber of Commerce
Glendale Chamber of Commerce
Greater Flagstaff Chamber of Commerce
Greater Phoenix Chamber
Green Valley Sahuarita Chamber of Commerce & Visitor Center
Lake Havasu Area Chamber of Commerce
Mesa Chamber of Commerce
Nogales-Santa Cruz County Chamber of Commerce
Queen Creek Chamber of Commerce
Southwest Valley Chamber of Commerce
Springerville-Eagar Regional Chamber of Commerce
Surprise Regional Chamber of Commerce
Tucson Metro Chamber
West Valley Chamber of Commerce Alliance
Wickenburg Chamber of Commerce
Arkansas
AR State Chamber/AIA
Little Rock Regional Chamber of Commerce
Rogers Lowell Chamber of Commerce
California
Brea Chamber of Commerce
Chino Valley Chamber of Commerce
Coalition of California Chambers Orange County
Dana Point Chamber of Commerce
El Dorado County Chamber
Greater Conejo Valley Chamber of Commerce
Joint Chambers Commission
Laguna Niguel Chamber of Commerce
Lincoln Area Chamber of Commerce
Lompoc Valley Chamber of Commerce
Long Beach Area Chamber of Commerce
Modesto Chamber of Commerce
Palm Desert Area Chamber of Commerce
Roseville Area Chamber of Commerce
San Juan Capistrano Chamber of Commerce
San Marcos Chamber of Commerce
Santa Barbara South Coast Chamber of Commerce
Simi Valley Chamber of Commerce
U.S. Minority Chamber of Commerce
West Ventura County Business Alliance
Colorado
Colorado BioScience Association
Colorado Chamber of Commerce
Greater Woodland Park Chamber of Commerce
Connecticut
Connecticut Business & Industry Association (CBIA)
Florida
Coral Gables Chamber of Commerce
Florida Chamber of Commerce
Georgia
Barrow County Chamber of Commerce
Georgia Chamber of Commerce
Perimeter Chamber
Hawaii
Chamber of Commerce Hawaii
Maui Chamber of Commerce
Idaho
Boise Metro Chamber
Cascade Chamber of Commerce
Pocatello-Chubbuck Chamber of Commerce
Illinois
Chamber630
Chicagoland Chamber of Commerce
Cook County Black Chamber of Commerce
Edwardsville/Glen Carbon Chamber of Commerce
Garfield Park Chamber of Commerce
GLMV Chamber of Commerce
Greater Springfield Chamber of Commerce
Illinois Black Chamber of Commerce
Illinois Chamber of Commerce
Lombard Area Chamber of Commerce
Naperville Area Chamber of Commerce
Pekin Area Chamber of Commerce
Sauk Valley Area Chamber of Commerce
West Suburban Chamber of Commerce & Industry
Indiana
Cedar Lake Chamber of Commerce
Indiana Chamber of Commerce
Indiana Health Industry Forum
South Bend Regional Chamber
Valpo Chamber
Wayne County Area Chamber of Commerce
Iowa
Council Bluffs Area Chamber of Commerce
Dubuque Area Chamber of Commerce
Mason City Chamber of Commerce
Spencer Chamber of Commerce Foundation
Kentucky
Commerce Lexington
Greater Louisville Inc. - The Metro Chamber of Commerce
Kentucky Chamber of Commerce
Northern Kentucky Chamber of Commerce
Louisiana
Baton Rouge Area Chamber
Louisiana Association of Business and Industry
Maryland
Maryland Chamber of Commerce
Massachusetts
Greater Boston Chamber of Commerce
Metro South Chamber of Comnerce
Michigan
Detroit Regional Chamber
Grand Rapids Chamber
Holly Area Chamber of Commerce
Lansing Regional Chamber of Commerce
Michigan Biosciences Industry Association (MichBio)
Michigan Chamber
Minnesota
Austin Area Chamber of Commerce
Eden Prairie Chamber of Commerce
Forest Lake Area Chamber of Commerce
Glencoe Area Chamber of Commerce
Lonsdale Area Chamber of Commerce
Marshall Area Chamber of Commerce
Minnesota Chamber of Commerce
Waconia Chamber of Commerce
Mississippi
Mississippi Economic Council
Montana
Great Falls Area Chamber of Commerce
Kalispell Chamber of Commerce
Montana Chamber of Commerce
Nebraska
Auburn Chamber of Commerce
Beatrice Area Chamber of Commerce & Gage County Tourism
Broken Bow Chamber of Commerce
Columbus Area Chamber of Commerce
Fremont Area Chamber of Commerce
Kearney Area Chamber of Commerce
Nebraska Chamber of Commerce & Industry
West Point Chamber of Commerce
Nevada
Henderson Chamber of Commerce
Vegas Chamber
New Hampshire
Business & Industry Association of New Hamshire
New Jersey
Greater Westfield Area Chamber of Commerce
HealthCare Institute of New Jersey (HINJ)
New Jersey Civil Justice Institute
New Jersey State Chamber of Commerce
New Mexico
New Mexico Biotechnology & Biomedical Association (NMBio)
New York
Capital Region Chamber
North Country Chamber of Commerce
North Carolina
NC Chamber
North Dakota
Chamber Grand Forks / East Grand Forks
Greater North Dakota Chamber
Ohio
Cedarville Area Chamber of Commerce
Chillicothe Ross Chamber of Commerce
Cincinnati USA Regional Chamber
Dayton Area Chamber of Commerce
Fostoria Area Chamber of Commerce
Ohio Chamber of Commerce
Shawnee Hills Area Chamber of Commerce
Toledo Regional Chamber of Commerce
Oklahoma
Greater Oklahoma City Chamber
State Chamber of Oklahoma
Oregon
Cottage Grove Area Chamber of Commerce
Lincoln City Chamber of Commerce
Oregon Business & Industry
Oregon State Chamber
Salem Area Chamber of Commerce
Pennsylvania
Chester County Chamber of Business and Industry
Greater Latrobe Laurel Valley Regional Chamber of Commerce
Hanover Area Chamber of Commerce
Indian Valley Chamber of Commerce
Mechanicsburg Chamber of Commerce
Pennsylvania Chamber of Business and Industry
Pennsylvania Food Merchants Association
Pittsburgh Airport Area Chamber of Commerce
Schuylkill Chamber of Commerce
Somerset County Chamber of Commerce
South West Regional Chamber of Commerce
Westmoreland County Chamber of Commerce
Rhode Island
Northern Rhode Island Chamber of Commerce
South Carolina
Hilton Head Island-Bluffton Chamber of Commerce
South Carolina Chamber of Commerce
Tennessee
Blount County Chamber of Commerce
Kingsport Chamber
Texas
Abilene Chamber of Commerce
Central Fort Bend Chamber
Greater Waco Chamber of Commerce
Houston West Chamber of Commerce
Longview TX Chamber of Commerce
North Texas Commission
Texas Association of Business
Utah
BioUtah
Cache Valley Chamber of Commerce
ChamberWest Chamber of Commerce
Payson Santaquin Area Chamber of Commerce
South Valley Chamber
St. George Area Chamber of Commerce
Virginia
Blackstone Chamber of Commerce
Central Fairfax Chamber of Commerce
Loudoun County Chamber of Commerce
Lynchburg Regional Business Alliance
Virginia Chamber of Commerce
Virginia Peninsula Chamber
Washington
Association of Washington Business
Greater Lake Stevens Chamber of Commerce
Greater Spokane Valley Chamber of Commerce
Greater Yakima Chamber of Commerce
Kittitas County Chamber of Commerce
Mercer Island Chamber of Commerce
Moses Lake Chamber of Commerce
Shelton-Mason County Chamber of Commerce
South Kitsap Chamber of Commerce
Washington Retail Association
West Plains Chamber of Commerce
West Virginia
West Virginia Chamber of Commerce
Wisconsin
Wisconsin Manufacturers and Commerce
Wyoming
Greater Cheyenne Chamber of Commerce
[i] Sen. Murphy noted when introducing legislation related to non-compete agreements in the 117th Congress: “All four of us are very excited about the FTC’s decision to move forward, but we’d like to give them clear statutory authority,” said Murphy, whose proposed Workforce Mobility Act in the 117th Congress was co-sponsored by Sens. Todd Young (R-IN), Tim Kaine (D-VA), and Kevin Cramer (R-ND).
