Executive Order seeks to improve worker mobility, promote competition

President Joe Biden recently issued an Executive Order (EO) on “Promoting Competition in the American Economy.” The order is wide-ranging, including 72 different initiatives aimed at more than a dozen federal agencies. For the most part, the order takes the form of encouraging the alphabet soup of agencies to take actions to regulate the conduct of various businesses, especially those in the healthcare, transportation, agriculture, and technology sectors. It covers everything from making hearing aids available over the counter to requiring airlines to be more transparent in pricing.

Noncompetes, restrictive licensing requirements targeted

With regard to employment law, the EO directs the Federal Trade Commission (FTC) to “curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.” Noncompete clauses restrict employees from working with competitors after leaving a company. According to the White House-issued fact sheet about the order, “roughly half of private-sector businesses require at least some employees to enter non-compete agreements, affecting some 36 to 60 million workers.”

The EO also encourages the FTC to ban unnecessary occupational licensing restrictions. According to the fact sheet, almost one-third of U.S. jobs require a license. The licenses are regulated by the states, each of which generally has its own licensing requirements. The inconsistent rules make it difficult for workers to move between states.