House Republicans accused the Federal Trade Commission of engaging in a “power grab” by proposing to ban non-compete agreements nationwide and demanded the agency turn over documents.
(Bloomberg) — House Republicans accused the Federal Trade Commission of engaging in a “power grab” by proposing to ban non-compete agreements nationwide and demanded the agency turn over documents.
In a letter to FTC Chair Lina Khan and her fellow commissioners, Judiciary Committee Chair Jim Jordan of Ohio and three others said the proposed non-compete rule exceeds the agency’s authority and would negatively impact the US economy. The missive represents the opening salvo from the newly Republican-helmed Judiciary panel, which signaled last year that it planned to scrutinize Khan once it gained control of the House.
“This power grab is just the latest example of the Biden FTC straying from the Commission’s mandate in its eagerness to centrally plan the American economy to meet a preferred social agenda,” Jordan wrote along with Representatives Darrell Issa of California and Thomas Massie of Kentucky, who chair two of the Judiciary panel’s subcommittees. Wisconsin Representative Scott Fitzgerald also signed the letter.
The FTC proposed a ban on non-compete clauses in employment contracts in January, a rule that would likely affect one in five Americans. Such agreements, which often bar workers from switching jobs within a certain period, are already illegal in some states, while others limit their use particularly among low-wage workers.
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Business groups like the US Chamber of Commerce have threatened to sue the agency over the proposed rule, arguing the FTC doesn’t have authority to issue such a sweeping rule without congressional authorization. The agency maintains it can issue the rule under its power to police “unfair methods of competition.”
The House letter seeks information on the FTC’s economic analysis of the rulemaking along with communications with the White House about the proposal.
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