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Executive Order on Competition

07/18/2021

A Presidential Executive Order directs the Chair of the Federal Trade Commission to exercise statutory rule-making authority to ban or limit non-compete agreements among employers.  It is a contention of the Administration that non-compete clauses and other provisions in employment agreements limit worker mobility. 

 

The Chair of the FTC is also directed to exercise statutory rule- making authority to ban unnecessary occupational licensing restrictions that impede economic mobility.  An issue of concern to the Administration is the fact that 30 percent of jobs require a state license.  Requirements vary widely among states and in many cases may impede the right to follow occupations.

 

The Executive Order directs the Attorney General and the Chair of the Federal Trade Commission to revise the Antitrust Guidance for Human Resource Professionals dating back to October 2016.  This document prevents employers from collaborating to limit wages and benefits by sharing information.

 

It is however considered necessary to retain non-compete agreements in specific cases to protect the intellectual property of a business following legal precedents that balance the interests of companies with those of their ex-employees. It is apparent that non-compete agreements affect up to 60 million workers extending from minimum wage employees in QSRs to corporate officers in the areas of strategy, marketing and technology. 

 

The Executive Order will establish a White House Competition Council consisting of agency heads including the Secretary of Labor.  The Council will coordinate responses to complaints of unfair competition.