Re: Request to Stay and Delay Implementation of the Noncompete Rule
DearCommissioners: On behalf of the undersigned organizations, we request that the Commission stay the effective date of the Non-Compete Clause Final Rule (89 Fed. Reg. 38,342-38,506, “Noncompete Rule”) to allow for judicial review.
Under Section 705 of the Administrative Procedure Act, agencies “may postpone the effective date of action taken by it, pending judicial review” when “justice so requires.” We strongly encourage you to exercise this power on the Noncompete Rule as FTC and other agencies recently have on other rulemakings. The Commission already elected to stay its CARS Rule pending litigation.1 Similarly, the Securities and Exchange Commission acted to stay its Climate Disclosure Rule, 2 and the National Labor Relations Board delayed the effective date of the Joint Employer Rule.3
A stay would be a prudent step. The impending effective date of the Noncompete Rule and lack of Commission guidance on key pieces of it – such as what it means to be in a policymaking position or how the Commission will apply its “functional” test – has creating substantial uncertainty for businesses and employees around the country. In delaying the CARS Rule, the Commission cited “misunderstandings of the Rule” and the “uncertainty” that resulted as areason for delay.4 A brief, voluntary delay would provide invaluable certainty as to the Rule’s potential effective date and conserve significant resources.
Although the Noncompete Rule’s legal fate remains in question, it is already imposing significant costs and uncertainty on the U.S. economy. Businesses are identifying existing noncompetes and notifying employees and former employees that their noncompetes may no longer be enforceable. Companies are incurring substantial legal costs as they explore other tools to attempt to protect their investments, and workers are losing training opportunities and bargaining power to negotiate compensation.
Noncompete agreements have been enforceable since before the country’s founding. A short implementation delay of a few months should impose no meaningful costs, and certainly no unexpected costs, on anyone. If the Commission ultimately succeeds in court, only a small number of noncompetes for policy-making senior employees entered into between September 4, 2024 and the final effective date would be impacted given the rule’s retroactivity requirements.
Finally, a brief delay would comport with the Commission’s mission of enforcing federal law in a cost-effective manner. As set forth in the Commission’s current strategic plan, the Commission “strives to efficiently address the competitive concerns raised by a merger or business practice and works toward a solution that maintains competition in the marketplace without unduly burdening legitimate business activity.” In keeping with this goal, a brief delay would provide invaluable certainty to the business community and, if the Rule ultimately is enjoined, potentially conserve significant resources around the country.
We thank you for your consideration of this request.
Sincerely,
National
ACA International
Advanced Medical Technology Association
Alternative Investment Management Association
American Bankers Association
American Coatings Association
American Council of Engineering Companies
American Foundry Society
American Hospital Association
American Hotel & Lodging Association
American Property Casualty Insurance Association
American Staffing Association
American Trucking Association
Associated Builders and Contractors
Associated Equipment Distributors
Associated General Contractors of America
Business Roundtable
Consumer Technology Association
Direct Selling Association
Federation of American Hospitals
FIA Principal Traders Group
FMI - The Food Industry Association
Foodservice Equipment Distributors Association
Futures Industry Association
HR Policy Association
Independent Electrical Contractors
Independent Insurance Agents & Brokers of America
Independent Lubricant Manufacturers Association
International Agribusiness Council
International Franchise Association
Investment Adviser Association
Meat Institute
MEMA, The Vehicle Suppliers Association
Metals Service Center Institute
MFA, Managed Funds Association
National Association of Business and Insurance Professionals
National Association of Convenience Stores
National Association of Manufacturers
National Association of Mutual Insurance Companies
National Association of Wholesaler-Distributors
National Automobile Dealers Association
National Federation of Independent Business
National Lumber & Building Material Dealers Association
National Mining Association
National Newspaper Association
National Pest Management Association
National Propane Gas Association
National Restaurant Association
National Tooling and Machining Association
National Waste & Recycling Association
NCTA - The Internet & Television Association
Precision Machined Products Association
Precision Metalforming Association
Reinsurance Association of America
Retail Industry Leaders Association
Securities Industry and Financial Markets Association
The Council of Insurance Agents and Brokers
U.S. Chamber of Commerce
U.S. Council for International Business
USTelecom - The Broadband Association
Wholesale & Specialty Insurance Association
Alabama
Prattville Area Chamber of Commerce
Selma and Dallas County Chamber of Commerce
Alaska
Alaska Chamber
Arizona
Arizona Chamber of Commerce and Industry
Buckeye Valley Chamber of Commerce
Carefree Cave Creek Chamber of Commerce
Chandler Chamber of Commerce
Greater Flagstaff Chamber of Commerce
Greater Phoenix Chamber
Green Valley Sahuarita Chamber of Commerce
Lake Havasu Area Chamber of Commerce
Mesa Chamber of Commerce
Nogales Santa Cruz County Chamber of Commerce & Visitor Center
Northwest Valley Chamber of Commerce
Peoria Chamber of Commerce
Prescott Valley Chamber of Commerce
Queen Creek Chamber of Commerce
Southwest Valley Chamber
Tucson Metro Chamber
West Valley Chamber of Commerce Alliance
Wickenburg Chamber of Commerce
Arkansas
AR State Chamber/AIA
Rogers-Lowell Chamber of Commerce
California
Brea Chamber of Commerce
Carlsbad Chamber of Commerce
Chino Valley Chamber of Commerce
Colusa County Chamber of Commerce
Dana Point Chamber of Commerce
Greater Coachella Valley Chamber of Commerce
Greater Grass Valley Chamber of Commerce
Greater San Fernando Valley Chamber of Commerce
Laguna Niguel Chamber of Commerce
Lincoln Area Chamber of Commerce
Long Beach Area Chamber of Commerce
Modesto Chamber of Commerce
Murrieta/Wildomar Chamber of Commerce
Newport Beach Chamber of Commerce
North San Diego Business Chamber
Palos Verdes Peninsula Chamber of Commerce
San Juan Capistrano Chamber of Commerce
Santa Barbara South Coast Chamber of Commerce
Santee Chamber of Commerce
Simi Valley Chamber of Commerce
Tracy Chamber of Commerce
West Ventura County Business Alliance
Western States Trucking Association
Yorba Linda Chamber of Commerce
Colorado
Greater Woodland Park Chamber of Commerce
Vail Valley Partnership
Florida
Florida Chamber Litigation & Regulatory Reform Center
Lakeland Chamber of Commerce
Venice Area Chamber of Commerce
Georgia
Barrow County Chamber of Commerce
Fayette Chamber of Commerce
Jackson County Area Chamber of Commerce
Newton Chamber of Commerce
Idaho
Boise Metro Chamber of Commerce
Greater Idaho Falls Chamber of Commerce
Pocatello-Chubbuck Chamber of Commerce, Inc.
Twin Falls Area Chamber of Commerce
Illinois
Chicagoland Chamber of Commerce
GLMV Chamber of Commerce
Grundy County Chamber of Commerce & Industry
Illinois Chamber of Commerce
Joliet Region Chamber of Commerce & Industry
Quad Cities Chamber of Commerce
The Greater Springfield Chamber of Commerce
Western DuPage Chamber of Commerce
Indiana
Fulton County Chamber of Commerce
Greater Lawrence Chamber of Commerce
Greater Valparaiso Chamber of Commerce
Indiana Chamber of Commerce
Shelby County Chamber of Commerce
South Bend Regional Chamber of Commerce
Tipton County Chamber of Commerce
Iowa
Iowa Association of Business and Industry
Kansas
Greater Topeka Chamber
Kentucky
Commerce Lexington
Greater Louisville, Inc.
Kentucky Chamber
Northern Kentucky Chamber of Commerce
Union County Chamber of Commerce
Louisiana
One Acadiana
Maine
Maine State Chamber of Commerce
Maryland
Maryland Chamber of Commerce
Massachusetts
Greater Boston Chamber of Commerce
South Shore Chamber of Commerce
Michigan
Battle Creek Area Chamber of Commerce
Cadillac Area Chamber of Commerce
Detroit Regional Chamber
Grand Rapids Chamber
Hartland Area Chamber of Commerce
Michigan Chamber of Commerce
Midland Business Alliance
Minnesota
Albert Lea-Freeborn County Chamber of Commerce
Greater Mankato Growth
I-94 West Chamber of Commerce
Lonsdale Area Chamber of Commerce
Minnesota Chamber of Commerce
SouthWest Metro Chamber of Commerce
Mississippi
Mississippi Economic Council
Missouri
Missouri Chamber of Commerce and Industry
Montana
Kalispell Chamber of Commerce
Montana Chamber of Commerce
Nebraska
Grand Island Area Chamber of Commerce
Kearney Area Chamber of Commerce
Nebraska Chamber of Commerce
Seward County Chamber & Development Partnership
Washington County Chamber of Commerce
Nevada
Carson City Chamber of Commerce
Henderson Chamber of Commerce
Vegas Chamber
White Pine Chamber of Commerce
New Hampshire
Business and Industry Association New Hampshire
New Jersey
New Jersey State Chamber of Commerce
New York
Capital Region Chamber of Commerce
The Business Council of New York State
North Carolina
Cabarrus Regional Chamber of Commerce
Highlands Chamber of Commerce/Visit Highlands NC
Ohio
Brookville Area Chamber of Commerce
Dayton Area Chamber of Commerce
Huber Heights Chamber of Commerce
Lima Allen County Chamber of Commerce
Ohio Chamber of Commerce
Shawnee Hills Area Chamber of Commerce
Oklahoma
State Chamber of Oklahoma
Oregon
Bend Chamber of Commerce
Canby Area Chamber of Commerce
Oregon Business & Industry
Salem Area Chamber of Commerce
Pennsylvania
Chamber of Business and Industry of Centre County
Hanover Area Chamber of Commerce
Harrisburg Regional Chamber
Lancaster Chamber of Commerce and Industry
Mechanicsburg Chamber of Commerce
Pennsylvania Chamber of Business and Industry
Pennsylvania Food Merchants Association
Schuylkill Chamber of Commerce
Somerset County Chamber of Commerce
Southern Chester County Chamber of Commerce
TriCounty Area Chamber of Commerce
Venango Area Chamber of Commerce
South Carolina
Anderson Area Chamber of Commerce
South Carolina Chamber of Commerce
Texas
Fort Worth Chamber of Commerce
Longview Chamber of Commerce
Nacogdoches County Chamber of Commerce
Utah
ChamberWest Chamber of Commerce
Salt Lake Chamber
St. George Area Chamber of Commerce
Utah Pacific Islander Chamber of Commerce
Virginia
Central Fairfax Chamber of Commerce
ChamberRVA
Loudoun County Chamber of Commerce
Lynchburg Regional Business Alliance
Roanoke Regional Chamber of Commerce
Virginia Chamber of Commerce
Washington
Association of Washington Business
Greater Spokane Valley Chamber of Commerce
Shelton-Mason County Chamber of Commerce
Washington Retail Association
Wisconsin
Beaver Dam Area Chamber of Commerce
Metropolitan Milwaukee Association of Commerce
Mosinee Area Chamber of Commerce
Oshkosh Chamber of Commerce
Rice Lake Area Chamber of Commerce
Wisconsin Manufacturers & Commerce
Wyoming
Campbell County Chamber of Commerce
Greater Cheyenne Chamber of Commerce
Jackson Hole Chamber of Commerce
