July 3, 2022

President Joe Biden speaks to members of the press ahead of Marine One’s departure from the South Lawn of the White House on July 7, 2021 in Washington, DC.

Alex Wong | Getty Images

WASHINGTON – President Joe Biden is due to issue an upcoming executive order calling on the Federal Trade Commission to put in place rules restricting non-compete obligations for workers who are part of a wider range of executive measures designed to increase competition in the marketplace.

The order is expected to be signed and published in the coming days, and it will fulfill Biden’s “campaign pledges to promote competition in labor markets,” White House press secretary Jen Psaki said on Wednesday.

In a related move, Biden will urge the FTC to ban “unnecessary” professional licensing requirements, Psaki said.

“While professional licensing can address important health and safety concerns, unnecessary or overly burdensome licensing can exclude people from jobs,” she added.

Biden will also encourage the FTC and the Department of Justice to work together to restrict employers ‘right to share workers’ wage information in ways that could adversely affect workers looking for better-paying jobs.

The text of the regulations has not been made public, but their long-term effectiveness will depend on the regulators who write the rules being able to weather legal challenges and actually force changes in the marketplace.

For example, license requirements are typically determined by the individual state, not the federal government. Therefore, it is unclear how new federal regulations would affect state regulations.

Taken together, these orders are part of a broader push within the Biden administration to encourage more competition in the US economy by restricting the ability of the largest corporations and employers to exert their power over their competitors and their employees.

The concept of using executive action to strengthen the hands of the workers and strengthen the reins of the industrial giants has its roots in the last few years of the Obama administration.

In the spring of 2016, then-President Barack Obama issued an executive order to “Increase Competition” by calling on federal authorities to combat anti-competitive behavior in their respective areas of responsibility.

The then Vice President Biden also threw himself behind the attempt to end non-compete obligations.

“Folks, no one should sit on the sidelines because of an unnecessary non-compete clause,” Biden said in an October 2016 statement.

“We have the most dynamic and productive workers in the world, but they cannot reach their true potential unless they have the freedom to negotiate higher wages with a new company or find another job after they are laid off.”

The election of former President Donald Trump in 2016 pretty much got to the heart of plans to extend regulations to the entire US economy. Instead, it initiated four years of laissez-faire financial and regulatory policy.

Biden ran against Trump for president, in part with the promise to abolish non-compete obligations. In 2020, his campaign said the agreements “hamper the ability of workers to seek higher wages, better benefits and working conditions by changing employers”.

Biden’s election in November threw the political switch again and brought the broader discussion about strengthening smaller companies and individual employees back to the center of the national political debate.