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Non-Compete and Executive Order on Promoting Competition in The American Economy

CoffyLaw, LLC Aug. 26, 2021

I’ve had a few clients reach out with questions regarding the recent executive order President Biden signed addressing non-competes, and thought I’d reach out to provide some clarity. As always, I’m here to answer any questions you may have.

While this recent order isn’t a nationwide ban per se, it seems the days of non-competes could still be numbered. Here’s what you need to know about the Executive Order on Promoting Competition in the American Economy signed by President Biden in early July:

  • The executive order laid out over 70 initiatives aimed at promoting competition and workers’ interests.

  • One of those initiatives asked the Federal Trade Commission (FTC) to use its authority to restrict the use of non-compete clauses that may unfairly limit worker mobility.

  • Remember, a non-compete is a type of employment contract that restricts a worker’s ability to work in a particular industry after leaving a job. Almost all non-competes limit where an individual can apply and for how long.

  • Non-competes were originally intended to protect employers. However, in recent years, many argue they’ve been used by employers to control workers unreasonably.

  • The mid-summer order seems to indicate that the president isn’t against using non-compete agreements to protect businesses. Rather, the order seems to be targeted at those that harm workers unnecessarily.

What this means for you is that now could be a good time to review your non-compete agreements for current state compliance with an eye towards future federal action. As you do, let me know if you have questions or would like another set of eyes on what you have.

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