A coalition of 230 national associations, including the AHA, is pushing back against the Federal Trade Commission's ban on noncompete agreements.
On May 24, the associations wrote a letter to the FTC urging the agency to delay the implementation of the noncompete rule to allow for judicial review.
"Under Section 705 of the Administrative Procedure Act, agencies 'may postpone the effective date of action taken by it, pending judicial review' when 'justice so requires,'" the letter said. "We strongly encourage you to exercise this power on the Noncompete Rule as FTC and other agencies recently have on other rulemakings."
In the letter, the associations said the absence of clear FTC guidance on critical aspects of the rule, like defining a policymaking position or the application of its functional test, has led to uncertainty for businesses and employees across the country.
"Businesses are identifying existing noncompetes and notifying employees and former employees that their noncompetes may no longer be enforceable," the letter said. "Companies are incurring substantial legal costs as they explore other tools to attempt to protect their investments, and workers are losing training opportunities and bargaining power to negotiate compensation."
The FTC's final rule, which is set to go into effect Sept. 4, is being contested in court by multiple parties, including the U.S. Chamber of Commerce, with a decision anticipated this summer, according to the AHA.