Biden seeks to crack down on noncompete clauses

An executive order aimed at limiting the use of noncompete clauses is expected to come soon.

President Joe R. Biden will urge his administration to crack down on noncompete employment contract provisions in an upcoming executive order.

According to a report from The Hill, the order would encourage the Federal Trade Commission (FTC) to ban or limit the use of noncompete agreements in employment contracts. These agreements limit employees’ opportunities when they leave the company and can lead to costly lawsuits.

It is unclear what impact any limitations would have on physicians currently working under a noncompete agreement.

“First, roughly half of private sector businesses require at least some employees to enter non-compete agreements, affecting over 30 million people,” White House Press Secretary Jen Psaki said in a press briefing on the provisions of the executive order. “This affects construction workers, hotel workers, many blue-collar jobs, not just high-level executives.(Biden) believes that if someone offers you a better job, you should be able to take it.It makes sense.

“So, in keeping with his campaign promise, the executive order will call on the FTC to adopt rules that curtail non- compete agreements.”

According to the New York Times,the executive will also call on the FTC to ban unnecessary occupational licensing, which limits a person’s chance to find employment across state lines where licensure may be different. It also encourages the FTC and the Justice Department to limit employers’ ability to share information on worker pay amongst themselves; which may amount to collusion.

Biden is also calling for antitrust regulators to begin examining how the recent glut of mergers can contribute to monopsonies, which can lead to stagnant wages and benefits, the Times reports.