Washington – When the Federal Trade Commission finalized a rule Banning non-compete clauses earlier this month, the blow was swift: Within 24 hours, the US Chamber of Commerce led a handful of trade groups. file a lawsuit Seeking to block the ban they argued that the FTC did not have the authority to enforce it.
The playbook is becoming familiar: The Biden administration finalizes a new rule regulating the business, and the Chamber and industry lobbying groups immediately sue to stop it, arguing that the agency overstepped its authority. Have done.
So far this year, the administration has finalized seven rules addressing such areas independent contractorsCredit Card late fees And Climate Disclosure RequirementsOnly to see him almost immediately sued by the Chamber and other groups.
The chamber said it expects to file a total of at least 22 lawsuits against the Biden administration before the end of President Joe Biden’s current term. According to the chamber, this is a dramatic increase over the number of lawsuits filed against the last two administrations — three against the Trump administration and 15 during Obama’s first term.
The American Bankers Association, another influential lobbying group in Washington, said it has signed on to four lawsuits against banking regulators by September 2022 and before that it had not signed on to any legal challenges to banking regulators for nearly a decade.
Officials with both the chamber and the ABA said litigation is always a last resort. But they see it as a necessary step when agencies issue rules that organizations consider beyond the scope of their authority.
“We have full confidence that these agencies are acting within their authorities,” White House assistant press secretary Michael Kikukawa said in a statement to CNBC. “These rules help American workers and families raise wages, lower costs, save lives, and build a fair economy.”
“It’s not just about one rule, right?” Neil Bradley, the chamber’s executive vice president, said in an interview with CNBC. “This is about 1,000 rules that are going to be finalized this year. This is about 200-plus rules that have an economic impact of more than $200 million per year.”
“We’ve moved from a time when we used to debate about a particular regulation,” Bradley said, “to a time where the concern is about the direction overall.”
According to a metric from George Mason University, total private sector regulations are increasing under Biden — especially compared to the Trump administration, during which they remained more or less stable.
But Patrick McLaughlin, director of policy analysis at George Mason’s free-market, libertarian Mercatus Center think tank, who created the metric, said the nature of Biden’s rules is more notable than the quantity.
The Biden administration, in McLaughlin’s view, “has been broad in its interpretation of the authorizing statutes.”
“The Chamber and others see an opportunity to push back on rules that, in their view, go beyond those authorized by Congress,” McLaughlin said.
The specific targets of the lawsuits vary: According to a spokesperson, the chamber has already sued a dozen agencies under the Biden administration, while only four under Obama. Despite the variety of issues, the group’s arguments largely center on the claim that agencies are trying to set rules in areas that can only be addressed by Congress.
For example, even before the FTC issued its ban on non-compete clauses, the Chamber promised to take FTC Chairwoman Lina Khan to court over it, regardless of the specifics.
Federal Trade Commission Chairwoman Lina Khan speaks during The New York Times’ annual DealBook Summit in New York City on November 29, 2023.
Michael M. Santiago | getty images
Before the final rule was released, Bradley said of Khan, “She can come up with a policy that we can actually agree on.” “But the precedent of that right is unacceptable.”
The Biden administration says all of its rules are focused on protecting consumers and saving them money. Administration estimates suggest that the FTC’s non-compete ban would increase wages by at least $400 billion over the next decade.
The administration also estimates that the Consumer Financial Protection Bureau’s move to cut credit card late fees would save 45 million Americans $220 per year, and the Environmental Protection Agency’s air-quality rulemaking would result in $46 billion in net health benefits in 2032. There will be savings of up to.
Critics of the regulation also argue that the Biden administration is not properly following the rulemaking process, failing to include stakeholder perspectives as part of the final regulation.
“When they insist on finalizing rules that fall outside their regulatory scope, and when they ignore constructive feedback from banks and other stakeholders,” ABA President and CEO Rob Nichols said at the group’s Washington summit. If we do, litigation is the only remaining tool in our toolbox.” mid March. “It’s not a tool we want to use, but it’s a tool we will continue to use strategically as needed.”
By definition, compliance with regulations incurs costs that are borne by companies. And rules that change depending on who occupies the White House — while hardly a new dilemma — could still create uncertainty whether businesses would prefer to operate without it.
“If you invest in something, would you discover that there are some obscure rules that you were unaware of that would suddenly reduce the value of that investment?” the Mercatus Center’s McLaughlin asked. “Or will you be completely stopped from being able to produce it?”