On July 9, 2021, President Joe Biden signed Executive Order 14036 providing direction to promote competition in the American economy. The Executive Order contains directives for federal agencies addressing issues in the Healthcare, Transportation, Agriculture, Internet Service, Technology, and Banking and Consumer Finance industries.
Most important, the Executive Order contains provisions addressing the labor market. Specifically, President Biden encouraged the Federal Trade Commission (“FTC”) to ban or limit non-compete agreements and to ban unnecessary occupational licensing restrictions that impede economic mobility. President Biden also directed the FTC and the Department of Justice (“DOJ”) to strengthen antitrust guidance to prevent employers from collaborating to suppress wages or reduce benefits by sharing wage and benefit information with one another.
In drafting this Executive Order, the White House issued a Fact Sheet detailing the need for these changes. Specifically, the White House found:
- Roughly half of private-sector businesses require at least some employees to enter non-compete agreements, affecting some 36 to 60 million workers;
- Almost 30% of jobs in the United States require a license, up from less than 5% in the 1950s, and fewer than 5% of occupations that require licensing in at least one state are treated consistently across all 50 states;
- Workers may be harmed by existing guidance provided by the DOJ and FTC to Human Resource personnel that allows third parties to make wage data available to employers—and not to workers—in certain circumstances without triggering antitrust scrutiny.
The Executive Order does not contain any specific orders or deadlines, but it does direct the FTC and DOJ to take action against non-compete agreements, occupational licensing, and exploitive use of wage data. We will continue to monitor the situation to identify when any rules or regulations are issued by either the FTC or DOJ regarding President Biden’s Executive Order. If you have any questions about this client alert, please contact your SGR Labor and Employment counsel.