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Why the US Must Ban Non-Compete Clauses

Tens of millions of workers across the US are subject to restrictive contracts that prevent them from leaving their current jobs. While Democrats recently lost their House majority, President Joe Biden has the authority to institute a national ban on non-compete clauses without new legislation.

WASHINGTON, DC – US President Joe Biden tweeted in August, “instead of workers begging employers for work, we’re seeing employers have to compete for American workers.” Many corporations, however, are not competing for workers. Instead, they’re using non-compete clauses to lock their employees in place, with more and more employers suing workers for seeking new opportunities. Tens of millions of workers across the United States are currently subject to contracts that force them to stay at their current jobs despite better opportunities elsewhere, thus limiting their freedom to accept a job or to start a business in their field.

In the past few years, many states – including Colorado, Illinois, Nevada, and Oregon – have restricted employers’ ability to impose these contracts on workers. But the recent weakening of a landmark law on non-compete clauses in the District of Columbia shows the limitations of the state-by-state approach.

The federal government must ban coercive non-compete clauses for all workers. While Democrats recently lost their majority in the House of Representatives, the Biden administration has the authority to institute a full national ban without new legislation. The president recognized as much when he called on the Federal Trade Commission to regulate non-compete clauses in his sweeping 2021 Executive Order on Promoting Competition in the American Economy. In that spirit, the FTC should act on Biden’s recommendation and outlaw non-compete clauses as quickly as possible.