Small Businesses Challenge Ban on Noncompete Agreements

Date: June 04, 2024

ATS Tree Services, LLC v. FTC concerns the final rule banning non-compete agreements

WASHINGTON, D.C. (June 4, 2024)NFIB filed an amicus brief in the case ATS Tree Services, LLC v. Federal Trade Commission (FTC) at the U.S. District Court for the Eastern District of Pennsylvania. This case challenges the FTC’s final rule banning noncompete agreements. NFIB opposed the FTC’s final rule issued in April 2024.

“This rule is as superfluous as it is detrimental for small businesses,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. “The FTC significantly underreported the impact this regulation will have on small businesses nationwide, while failing to provide any substantial reasoning for the necessity of this arbitrary mandate.”

The brief makes two main arguments: 1) the FTC premised the final rule on a seriously flawed cost-benefit analysis, and 2) the FTC’s fallacious and internally inconsistent “reasoning” establishes that the rule is arbitrary and capricious.

NFIB filed the brief with the National Retail Federation, International Franchise Association, Associated Builders and Contractors, American Hotel & Lodging Association, National Association of Wholesale Distributers, Independent Electrical Contractors Consumer Technology Association, the Home Care Association, the Restaurant Law Center, and U.S. Council for International Business.

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

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