As of Friday (July 16, 2021), we again have competing approaches to federal legislation proposing limits on noncompetes. In addition to the previously reintroduced Workforce Mobility Act, proposing an outright ban, Senators Marco Rubio (R-Fla.) and Maggie Hassan (D-NH) have now reintroduced the Freedom to Compete Act to ban noncompetes for most workers who are not exempt under the Fair Labor Standards Act of 1938.
The updates keep coming, but the information does not — well, at least not quickly. President Biden’s Executive Order on Promoting Competition in the American Economy is now available, but references noncompetes in only two quick sentences throughout the 46 pages. Those two sentences provide only a bit more guidance.
This afternoon, President Biden signed an “Executive Order on Promoting Competition in the American Economy,” which included pushing for the regulation of noncompetes by the FTC. Based on his comments during today’s press conference (discussed in the post), we expect that any regulation will be balanced, focusing on regulating the abuses, rather than a throw-the-baby-out-with-the-bathwater wholesale ban.
President Biden had said that he “will work with Congress to eliminate all non-compete agreements, except the very few that are absolutely necessary to protect a narrowly defined category of trade secrets.” However, he has now announced that he will issue an executive order pushing for the limitation or elimination of noncompetes.
With all of the changes at the state level (45 bills in 21 states, plus D.C.’s near-total ban, which is, as of yesterday, now officially adopted and pending funding, likely in the fall, it seems), the federal efforts — spearheaded by Senator Chris Murphy — continue to inch forward. During the Senate the confirmation hearing of Julie Su (currently the Secretary of the California Labor and Workforce Development Agency) for the position the Deputy Labor Secretary, Senator Chris Murphy reminds us that his bill to ban noncompetes is still in the works — and that, ultimately, he expects the FTC to regulate noncompetes.
Another Congress, another federal noncompete bill: Four Senators and one Congressman have reintroduced a federal bill to ban all employee noncompetes.
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