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

DirecTV is pushing its pay TV bundle —...

August 14, 2024

PepsiCo buys prebiotic soda brand Poppi for nearly...

March 18, 2025

Trump says it’s ‘highly unlikely’ he will fire...

July 18, 2025

Reddit pops 48% in NYSE debut after selling...

March 25, 2024

Capital One acknowledges ‘outage’ as users report issues...

January 17, 2025

Bed Bath & Beyond relaunches with first store...

August 9, 2025

Stock splits are back in fashion. Here’s why,...

June 17, 2024

Delta cancels hundreds more flights as DOT opens...

July 24, 2024

Grocery stores are rationing eggs as supply falls...

February 15, 2025

Johnson & Johnson to pay $6.5 billion to...

May 7, 2024

    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

    • Convenience stores are eating fast-food chains’ breakfast

      September 15, 2025
    • The Real Drivers of This Market: AI, Semis & Robotics

      September 15, 2025
    • S&P 500 Breaking Out Again: What This Means for Your Portfolio

      September 15, 2025
    • Death penalty looms for Charlie Kirk’s accused killer, but legal bar is high as Trump, Cox mount pressure

      September 15, 2025
    • Turning Point USA says campus chapter requests surge to over 32,000 after Kirk’s assassination

      September 15, 2025
    • Trump says ‘we’ll see what happens’ when asked about possibility of striking Venezuela amid rising tensions

      September 15, 2025

    Categories

    • Business (1,383)
    • Politics (4,484)
    • Stocks (1,649)
    • Uncategorized (45)
    • World News (1,376)
    • 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