By Dave Michaels and Russell Adams
WASHINGTON -- The nation's biggest business lobbying group and a national tax-services firm both sued the Federal Trade Commission on Wednesday, igniting a flare of lawsuits over the agency's regulation aimed at ending noncompete agreements.
The U.S. Chamber of Commerce challenged the regulation in federal court in East Texas, while the tax firm Ryan LLC filed its lawsuit in Dallas. Other business groups joined the chamber's suit, including the Business Roundtable, which represents chief executive officers of some of the country's biggest employers.
The rule, issued by the FTC on Tuesday, prohibits companies from enforcing existing noncompete agreements on anyone other than senior executives. The FTC says one in five Americans is subject to noncompete agreements.
The FTC says that noncompete clauses, which typically prevent workers from taking a new job or starting a business for a certain time period after leaving an employer, hamper competition for labor and result in lower pay and benefits for workers. Businesses that use them say they are an effective way to protect their intellectual property, customer relationships and other investments.
An FTC spokesman wasn't immediately available for comment.
Write to Dave Michaels at dave.michaels@wsj.com and Russell Adams at Russell.Adams@wsj.com
(END) Dow Jones Newswires
April 24, 2024 10:34 ET (14:34 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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