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NELF Submits Second Brief Challenging FTC’s Overreach on Employment Contracts
Ryan, LLC and Chamber of Commerce of the United States v. Federal Trade Commission
(U.S Court of Appeals for the Fifth Circuit)
Boston, MA (February 11, 2025)—The New England Legal Foundation today filed an amicus curiae brief in the U.S. Court of Appeals for the Fifth Circuit explaining why the court should affirm a permanent injunction against Federal Trade Commission’s ban on non-compete employment agreements. The brief follows closely upon NELF’s filing of a similar brief in the Eleventh Circuit opposing the ban.
The FTC’s nationwide ban, which would affect 30 million contracts by the FTC’s own estimate, was issued on the strength of the Commission’s claimed rulemaking power over unfair methods of competition. After the ban was issued in 2024, litigation promptly sprang up challenging the Commission’s claim that Congress delegated it the rulemaking power when the Federal Trade Commission Act was enacted in 1914.
As in its earlier amicus brief, NELF advances a detailed analysis of the language used in the Act and criticizes the Commission’s for its out-of-context reading of key passages. NELF demonstrates that its own reading is the one consistent with the facts of the Act’s legislative history. Again, NELF showed that the 1973 appeals court decision that the FTC relies on flouts the concerns that animated the 63rd Congress when creating the Act. As a result, the 1973 decision anachronistically foisted upon the Act the concerns of a later generation.
“The Fifth Circuit appeal, like the Eleventh Circuit one, is bound ultimately for the Supreme Court,” observed NELF staff attorney John Pagliaro, who authored the amicus brief. “That is the one thing both sides can agree on. It will be yet another major test of how far an agency be permitted extend its authority when it is doing so only on very shaky statutory foundations.”
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About the New England Legal Foundation: Founded in 1977, the New England Legal Foundation (NELF – www.newenglandlegal.org) is the leading non-partisan, non-profit public interest law firm in the region dedicated to economic liberty. NELF’s ongoing mission is to champion free enterprise, property rights, limited government based on rule of law, and inclusive economic growth. We believe that free enterprise is a foundational value of a democratic society and the best opportunity for people to lift themselves to prosperity.