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The White House Wants To Clamp Down On Noncompete Agreements

National Economic Council director Brian Deese and White House press secretary Jen Psaki take questions from reporters on July 2.
National Economic Council director Brian Deese and White House press secretary Jen Psaki take questions from reporters on July 2.

Updated July 7, 2021 at 1:20 PM ET

President Biden wants to curb the use of noncompete agreements, which have become widespread not only in white collar jobs but also for employment contracts with construction and hotel companies, the White House said.

Biden will call on the Federal Trade Commission to adopt new rules governing the use of noncompetes as part of an executive order aimed at promoting competition, White House press secretary Jen Psaki told reporters.

"He believes if someone offers you a better job, you should be able to take it. Makes sense," Psaki told reporters on Wednesday.

Psaki said about half of U.S. businesses require at least some of their workers to sign noncompetes, and estimated more than 30 million Americans are working under the agreements.

The executive order will also urge the FTC to ban unnecessary licensing requirements for jobs – something that particularly affects military families who regularly move between states regularly, she said.

The executive order is expected to be unveiled in coming days. It will include provisions to address noncompetitive practices in parts of the economy — such as airlines and agriculture — where a handful of large companies exert a lot of market power, she said.

Specifically, it would direct the Department of Agriculture to make it easier for farmers to fight back against corporate agriculture companies, bring claims under the Packers and Stockyards Act, and aim to prevent chicken processors from underpaying farmers, a source said. The proposed changes would also protect farmers from retaliation when they speak out about bad behavior.

The president will also encourage the FTC to allow farmers to repair their farming equipment as they choose, rather than being limited by tractor manufacturers that prevent farmers from using independent repair shops through the use of proprietary tools, software and diagnostics that force farmers to use dealers for repairs.

Psaki said the White House plans to direct the USDA to clarify that meat can only be labeled as a "Product of the USA" when the livestock is raised in the United States — and that the label cannot be used when meat is merely processed in the United States.

The executive order is a broad measure that intends to deal with competition across multiple industries. The White House's thinking is that antitrust measures, such as this executive order, will help drive more durable economic growth in the long run.

The order will also direct the Department of Transportation to come up with a series of rules the White House says ought to create more transparency and assistance for airline passengers.

"These rule-makings will specifically ensure that if a passenger pays to check a bag, they should get that fee back if the bag doesn't arrive on time," Brian Deese, director of the National Economic Council, told reporters last week. "Also, if the passenger pays for a service like Wi-Fi, and it doesn't actually work, that you will get that fee back quickly."

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