Biden to limit U.S. use of noncompete agreements for workers

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President Biden will sign an executive order curtailing the use of noncompete agreements that block workers who leave a job from working for a competitor, White House press secretary Jen Psaki said Wednesday.

Noncompete agreements were fairly widespread in white-collar jobs, but have become increasingly common in blue-collar industries like construction and hospitality.

Ms. Psaki said the president “believes that if someone offers you a better job you should be able to take it.”

Mr. Biden will also call on the Federal Trade Commission to draft rules to limit the use of such agreements, according to Ms. Psaki, who estimated the pacts affect more than 30 million workers.

The same executive order will also call on the FTC to ban unnecessary licensing requirements for jobs, which affects workers who move between states and then need to get a new license.

“While occupational licensing can serve important health and safety concerns, unnecessary or overly burdensome licensing can lock people out of jobs,” Ms. Psaki said.

The FTC has investigated the use of licensing certain workers, probing whether the requirements have been used in some industries to prevent competition.

Together, the proposals are part of the Biden administration’s effort to boost competition for workers by restricting how companies can exercise power over their workers.

Companies have argued that noncompete agreements prevent rivals from pilfering employees who then take with them their institutional knowledge to boost their new companies.

On the campaign trail last year, Mr. Biden pledged to eliminate noncompete agreements, saying the clauses “hinder the ability of employees to seek higher wages, better benefits and working conditions by changing employers.”

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