FTC Commissioner Christine Wilson, published an Op-Ed in the Wall Street Journal today in which she announced her resignation from the FTC and explained her reasoning. Readers may recall that Commissioner Wilson was the lone dissenting voice on the FTC’s proposed banning rule non-competes nationwide.
In the Op-Ed, Commissioner Wilson says that her decision to resign arose out of FTC Chair Lina Khan’s “disregard for the rule of law and due process and the way senior FTC officials enable her,” concluding with: “I refuse to give their endeavor any further hint of legitimacy by remaining” at the Commission. Relevant to the FTC’s proposed non-competitive banning rule, Commission Wilson had this to say:
My fundamental concern with her leadership of the commission maintains her willful disregard of congressionally imposed limits on agency jurisdiction, her defiance of legal precedent, and her abuse of power to achieve desired outcomes. . . .
In November 2022, the commission issued an antitrust enforcement policy statement asserting that the FTC could ignore decades of court rulings and condemn essentially any business conduct that three unelected commissioners find distasteful. If conduct can be labeled with a nefarious adjective—“coercive,” “exploitative,” “abusive,” “restrictive”—it may violate the FTC Act of 1914. But the new policy contains no descriptions or definitions of these terms, many of which also lacks context in the law. The commission also candidly explained that its analysis under the new policy may depart from prior antitrust precedent, and previously identified legal conduct as now suspect. In other words, the new policy adopts an “I know it when I see it” approach. But due process demands that the lines between legal and unlawful conduct be clearly drawn, to guide businesses before they face a lawsuit.
In January 2023, the commission launched a rulemaking that would ban nearly all noncompete clauses in employee contracts, affecting roughly one-fifth of employment contracts in the US This proposed rule defies the Supreme Court’s decision in West Virginia v. EPA (2022), which held that an agency can’t claim “to discover in a long-extant statute an unheralded power representing a transformative expansion in its regulatory authority.
These reasons mirror concerns we have raised. With Commissioner Wilson’s resignation, only three Commissioners remain, all of whom signed onto the proposed banning rule non-competites.