U.S. business lobby group lambasts FTC over proposed ban on non-compete clauses

FILE PHOTO: Signage is seen at the Federal Trade Commission headquarters in Washington, D.C.

(Reuters) – The U.S. Chamber of Commerce criticized on Thursday a proposed rule of the Federal Trade Commission (FTC) that seeks to ban companies from having non-compete clauses with workers, saying such a move would harm economic growth and limit competition.

The FTC proposed the rule last week that would ban companies from requiring workers to sign non-compete provisions in contracts, in the latest sign from the Biden administration of its support for labor.

Companies generally use these provisions to keep workers from leaving for better jobs.

“It is not the role of government to direct the behavior of business, redistribute power in our economy, or undermine the competition that fuels free enterprise,” the largest U.S. business group’s President Suzanne Clark said at the State of American Business event.

The Chamber also said it could mount a legal challenge.

(Reporting by Akanksha Khushi in Bengaluru; Editing by Muralikumar Anantharaman)