“The Proposed Rule violates the major-questions doctrine and fundamental principles of justice.”
—John Masslon, WLF Senior Litigation Counsel

Click here for WLF’s comment.

WASHINGTON, DC— Washington Legal Foundation (WLF) today urged a federal regulator to withdraw a Proposed Rule banning almost all noncompete agreements nationwide. In formal comments filed with the Federal Trade Commission, WLF explains that the Proposed Rule infringes on the fundamental right to contract, violates the major-questions doctrine, and threatens the American dream.  

Our nation’s economy is built on the ability of parties to enforce contracts. Parties can exchange things of value so that everyone benefits. This reliance on contracts is not new; it has been a feature of the American experiment since day one. It is one reason that our country flourished when other nations struggled. But the Proposed Rule seeks to curtail this fundamental right to contract by barring companies and employees from agreeing to noncompete clauses. It also makes current noncompete agreements unenforceable. As WLF’s comment explains, the FTC should not infringe on this fundamental right to contract.  

WLF’s comment also details how the Proposed Rule violates the major-questions doctrine. The Proposed Rule affects about 30 million Americans. If Congress had wanted to give the FTC power to issue such a broad regulation, it would have made a clear statement to that effect. It has not done so. As the Proposed Rule raises a major question that Congress has not explicitly given the FTC power to answer, courts will likely strike it down as exceeding the FTC’s authority.

Finally, WLF’s comment explains how the Proposed Rule will hurt low-skilled American workers. Rather than receive on-the-job training that helps women rise from working on the assembly line to the CEO’s office at General Motors, employees will be forced to pay for training. As many low-skilled workers cannot afford training, they will lose the ability to live the American dream. WLF therefore urges the FTC to see the errors of its way and withdraw the Proposed Rule.