Biden administration tells employers to stop shackling workers with ‘noncompete agreements’

[Pelican Press 0]

Biden administration tells employers to stop shackling workers with ‘noncompete agreements’

Credit: Pixabay/CC0 Public Domain

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“: Employers owe their employees nothing in the relationship except earned wages, and employees are at liberty to quit at their option. As the rule is generally stated, either party may terminate the arrangement at any time for a good or bad reason, or none at all.

In keeping with that no-strings-attached spirit, employees may move on as they see fit—unless, that is, they happen to be among the

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by a contract that explicitly forbids getting hired by a competitor. These

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may make sense for CEOs and other top executives who possess trade secrets, but they can seem nonsensical when they’re applied to

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such as draftsmen in the construction industry.

President Joe Biden

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about the oppressive nature of noncompete contracts in July 2021.

And the Federal Trade Commission—a federal agency responsible for policies that affect competition within the economy—has now decided to ban them.

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, in

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, the majority agreed to curb noncompete contracts.

Previous noncompetes for senior executives will remain in place, but all others, with few exceptions, will

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.

The rule is slated to go into effect in late August. However, legal actions could delay or block these changes. The

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and other

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to stop it soon after the FTC vote.

As a

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, I have many concerns about noncompete clauses—such as how they tend to aggravate the power imbalances in relationships between workers and bosses,

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.

Labor rights and the law

Courts began to

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, making exceptions only for employees with fixed-term contracts.

With the passage of the

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in 1935, all private-sector workers and unions gained the power to collectively bargain with employers. Subsequent labor agreements, such as the one negotiated by the

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with Carnegie-Illinois Steel in 1937, made employers prove “just cause” before ******* any person covered by the contract.

The

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added employment protections prohibiting discrimination based on race, gender, religion and national origin. And the

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, which Congress passed in 1990, ensured that people with disabilities would have access to jobs with or without reasonable accommodation.

Those laws and other measures, including modern exceptions to the at-will rule, offer workers some job security.

But

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, until now there has been no federal protection from noncompete clauses.

Noncompetes and low-wage workers

FTC chair

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, some

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, are in this boat.

Noncompete clauses are more common among higher-paid Americans, but more than

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an hour are covered by noncompete agreements, according to a 2021 study by the Federal Reserve Bank of Minneapolis.

Wages for U.S. workers will rise by

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once there are fewer noncompete clauses, the FTC estimates.

In announcing the ban, the

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that might ***** losing high-performing workers due to the new rules.

“Instead of using noncompetes to lock in workers, employers that wish to retain employees can compete on the merits for the worker’s labor services by improving wages and working conditions.”

Put another way, when employers pay workers better, their employees are more satisfied and less likely to quit.

Provided by
The Conversation

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under a Creative Commons license. Read the

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Citation:
Biden administration tells employers to stop shackling workers with ‘noncompete agreements’ (2024, April 25)
retrieved 25 April 2024
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