The firm Ryan is joined in challenging the FTC by the U.S. Chamber of Commerce, business groups, Ryan, a Dallas-based global tax services firm, filed the first of what would soon be a slew of lawsuits against the ban.
The groups, like Ryan, argue that the FTC’s decision from a 3-2 vote sets a dangerous precedent of micromanagement by the federal government over business. The U.S. Chamber of Commerce President and CEO Suzanne Clark called the FTC’s decision an “unlawful power grab.” Ryan wouldn’t knowingly set up operations in jurisdictions bans on noncompete agreements because they can’t protect their information, he said. It dissuades the company from investing in innovation labs in those states.
The country’s largest labor organization AFL-CIO commended the ruling on Tuesday, writing that “Noncompete agreements trap workers from finding better jobs, drive down wages, and stifle competition,” the group posted on X.Roughly 30 million workers, or one in five Americans, are subject to noncompete clauses, the federal agency estimates. Under the new rule, some senior executives can remain in existing noncompetes but employers cannot create new noncompete rules.
But it’s insufficient and in practice, doesn’t work well, Ryan said. His firm has spent hundreds of thousands dollars trying to determine if a former employee with an NDA inappropriately used confidential trade secrets and intellectual property.“Once it’s out there you lose the nature of that trade secret and it’s gone forever,” Ryan said.