The Trader Harbor
  • Business
  • Politics
  • World News
  • Stocks
  • Business
  • Politics
  • World News
  • Stocks

The Trader Harbor

Business

Biden administration bans noncompete agreements, setting up legal showdown with business groups

by admin April 24, 2024
April 24, 2024
Biden administration bans noncompete agreements, setting up legal showdown with business groups

The Biden administration has issued a nationwide ban on the ability of employers to make their workers sign noncompete agreements, a move regulators said would help boost employee pay but which is set to be challenged in court by business groups.

In a ruling Tuesday afternoon, the Federal Trade Commission (FTC) said noncompete clauses would henceforth be illegal. The measure was necessary, it said, for ‘protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.’

“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism,” said FTC chair Lina M. Khan in a statement. “The FTC’s final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”

The FTC estimates nearly one in five Americans are subject to noncompetes. They have grown increasingly common in lower wage or hourly work industries like fast food franchises, restaurants, and security firms, where some employers have sought to limit the ability of workers to effectively raise their pay by looking for work at competing establishments.

In addition to banning all new noncompetes, the FTC’s rule applies to all existing noncompete agreements. Employers will now have to provide notice to workers bound to a current noncompete that it will not be enforced against them.

The rule was hailed by labor groups and left-leaning policy experts.

‘Noncompetes are about reducing competition, full stop. It’s in their name,’ said Heidi Shierholz, president of the progressive nonprofit Economic Policy Institute. ‘Noncompetes are bad for workers, bad for consumers, and bad for the broader economy. This rule is an important step in creating an economy that is not only strong but also works for working people.’

The AFL-CIO, America’s largest labor group, praised the new rule in a post on X Tuesday, saying noncompete agreements ‘trap workers from finding better jobs, drive down wages, and stifle competition.’

But business groups are already hitting out at the ban, saying noncompetes are essential to protecting trade secrets and proprietary information. The groups also say noncompetes ultimately help workers by engendering a more collaborative firm environment and limiting so-called ‘free riders,’ or employees who seek to capitalize on a specific company’s methods and taking that knowledge elsewhere.

The U.S. Chamber of Commerce, the country’s largest business lobby, said it plans to sue the FTC over the ruling. In a statement, it called the ban an ‘unlawful power grab.’

“This decision sets a dangerous precedent for government micromanagement of business and can harm employers, workers, and our economy,’ it said. 

Separately. a Dallas-based tax services firm filed a lawsuit in Texas federal court — which has proven hostile to Biden administration rulings — challenging not only the ban but the very structure of the FTC itself.

‘We stand firm in our commitment to serve the rightful interest of every company to retain its proprietary formulas for success taught in good faith to its own employees,” said chairman and CEO G. Brint Ryan said in a statement.

The FTC’s rule is set to go into effect in August, but is unlikely to be enforced until the court challenges are resolved, something that could take years.

This post appeared first on NBC NEWS

0
FacebookTwitterGoogle +Pinterest
previous post
Express files for bankruptcy, plans to close nearly 100 stores as investor group looks to save the brand
next post
Tesla’s affordability push eases growing doubts about its performance and Musk’s focus

Related Posts

American Eagle shares plunge 17% after it withdraws...

May 15, 2025

Tesla’s affordability push eases growing doubts about its...

April 24, 2024

Former FTX chief Sam Bankman-Fried seeks no more...

March 4, 2024

College protesters want their schools to divest from...

April 26, 2024

Dollar General CEO warns consumers are cash-strapped and...

March 14, 2025

From tariffs to DOGE, what companies are saying...

February 19, 2025

UnitedHealthcare sued by shareholders over reaction to CEO’s...

May 9, 2025

65-year-old quit his job and emptied his life...

July 18, 2024

Rules for repaying Social Security benefits are about...

March 11, 2025

Trump accused Fed governor Lisa Cook of mortgage...

August 29, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • Ben & Jerry’s co-founder resigns, claiming parent company Unilever ‘silenced’ its campaigning

      October 10, 2025
    • The Real Drivers of This Market: AI, Semis & Robotics

      October 10, 2025
    • S&P 500 Breaking Out Again: What This Means for Your Portfolio

      October 10, 2025
    • Could Trump win the Nobel Peace Prize after Israel-Hamas deal?

      October 10, 2025
    • RFK Jr shocked over pregnant moms protesting Trump with Tylenol: ‘Pathological’

      October 10, 2025
    • Top insurance CEO in the hot seat after scathing ad campaign exposes China ties

      October 10, 2025

    Categories

    • Business (1,416)
    • Politics (4,700)
    • Stocks (1,699)
    • Uncategorized (45)
    • World News (1,409)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: TheTraderHarbor, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 thetraderharbor.com | All Rights Reserved