On May 15, 2024, the National Federation of Independent Business (NFIB) filed an amicus brief in the case Ryan, LLC. v. Federal Trade Commission (FTC) at the U.S. District Court for the Northern District of Texas. The brief supports a challenge to the FTC’s final rule banning noncompete agreements, arguing that the FTC lacks authority to implement such a ban.
The NFIB had previously expressed opposition to the FTC’s final rule issued in April 2024. “The FTC’s final rule on non-competes is a textbook example of arbitrary rulemaking,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. She added that "the final rule leaves small businesses with vague conditions that make it difficult for owners to correctly comply."
Milito criticized the FTC's bureaucrats for misrepresenting small businesses' needs and the potential impact of their policies on Main Street businesses. She expressed hope that their amicus would correct these misconceptions and lead to the court rejecting the FTC's final rule.
The brief presents two primary arguments: firstly, it claims that the FTC based its final rule on a flawed cost-benefit analysis; secondly, it asserts that the commission's fallacious and internally inconsistent reasoning establishes that its rule is arbitrary and capricious.
The NFIB filed this brief alongside several other organizations including the National Retail Federation, International Franchise Association, Associated Builders and Contractors, American Hotel & Lodging Association, National Association of Wholesale Distributors, Independent Electrical Contractors Consumer Technology Association, Home Care Association, Restaurant Law Center, and U.S. Council for International Business.
The NFIB Small Business Legal Center works to protect small business owners' rights in courts across America. Currently active in over 40 cases in federal and state courts nationwide as well as in the U.S Supreme Court, NFIB continues its advocacy for small businesses.
