President Biden Issues Executive Order on Promoting Competition in the American EconomyJuly 12, 2021
The Order directs various federal agencies to combat anti-competitive conditions affecting the U.S. economy. The Order consists of 72 initiatives and recommendations across multiple sectors. Among other things, the Order targets fair labor initiatives, including non-competition provisions. Specifically, the Order “encourages” the Chair of the FTC to consider working with Commission to exercise the FTC’s rule-making authority “to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.” In its corresponding press statement, the White House states that the Order “[e]ncourages the FTC to ban or limit non-compete agreements.” The statement also notes that “[t]ens of millions of Americans—including those working in construction and retail—are required to sign non-compete agreements as a condition of getting a job, which makes it harder for them to switch to better-paying options,” and states that the Order’s initiatives will, among other things, “[m]ake it easier to change jobs and help raise wages by banning or limiting non-compete agreements.”
The Order does not impact current laws governing non-competition agreements, including those between employers and employees. While it is not clear whether or how the FTC will respond to this Order, employers should continue to watch for developments in this space, on both a federal and state level.
Our memorandum which discusses the Order in more detail can be found here.