Biden Administration Asks Federal Trade Commission to Limit Restrictive Clauses in Recent Executive Order
White House Press Secretary Jen Psaki said earlier last week of noncompete clauses: “[R]oughly half of private sector businesses require at least some employees to enter noncompete agreements, affecting over 30 million people. This affects construction workers, hotel workers, many blue-collar jobs, not just high-level executives.”
Biden will further encourage the FTC and the Department of Justice to work together to limit employers’ rights to share worker pay information in ways that could negatively impact workers looking for better paying jobs.
Whether these orders will withstand legal challenges remains to be seen, particularly given occupational licensing requirements and noncompete agreements are regularly determined by states and not the federal government. Supporters of noncompete agreements strongly believe they protect trade secrets and investments and will likely push back on attempts to prohibit them in the workplace.
Nonetheless, Biden’s executive order is a significant shift from current precedent.
Our firm will be keeping a close eye on further developments, so stay tuned for future posts discussing the impact of the orders and any legal challenges.