Insight

Biden Targets Non-Competes, But They Still Have Their Place

Limitations on non-compete agreements are increasing, aided by an executive order by President Biden in July.

Biden Targets Non-Compete Agreements
JE

John Ettorre

August 4, 2021 02:00 PM

In a sweeping July executive order containing 72 directives to more than a dozen federal agencies, President Biden looks to promote greater competition in the economy. One of the directives, about reining in the use of non-compete agreements, concerns a subject that’s long been a source of discomfort for many lawyers.

“Even though we all cringe a bit about non-competes, we continue to allow them under controlled circumstances,” says David Carr, a partner with the Indianapolis firm Ice Miller.

Mr. Carr, who’s been practicing for 37 years, notes that he’s represented both sides of the issue. “One day we’re trying to enforce a non-compete and the next day we’re defending against them.” For years he’s shared a presentation with clients outlining why they should be used only in certain situations.

Further Limits Expected

The regulation of non-compete agreements has always been an exclusive matter of state law, and three states bar them entirely, while a dozen more place certain limitations on their use. While there has never been a federal law regulating non-compete agreements—though several such bills have been introduced—Biden’s executive order directs the Federal Trade Commission to restrict them as a matter of agency policy. There’s every reason to believe the FTC, chaired by antitrust warrior Lina Khan, will do so aggressively.

In a recent letter to the White House and the FTC, more than 50 prominent trade secret lawyers outlined what they said is a real-world approach to regulating non-competes that balances competing interests while not depending too heavily on what it called “inconclusive academic studies.”

Pointing to an industry study that found more than half of ex-employees admit to stealing confidential employer secrets, the lawyers argued that “when used appropriately, noncompetition agreements can be an extremely effective tool to prevent the harm caused by this type of information exfiltration.”

The Upshot

While the FTC is extremely unlikely to ban non-compete agreements, look for the agency to apply certain limits, such as the use of non-competes for the lowest-paid employees.

John Ettorre is an Emmy-award-winning writer, based in Cleveland. His work has appeared in more than 100 publications, including the New York Times and the Christian Science Monitor.

In a sweeping July executive order containing 72 directives to more than a dozen federal agencies, President Biden looks to promote greater competition in the economy. One of the directives, about reining in the use of non-compete agreements, concerns a subject that’s long been a source of discomfort for many lawyers.

Related Articles

Compelled to Compete


by Ashish Mahendru

Courts and legislatures—and now the White House—are taking an increasingly dim view of noncompete employment agreements, a development the pandemic has quickened. What can employers do to protect their confidential information?

Protection for Employers Beyond Noncompetes

SCOTUS Rules in Andy Warhol Fair Use Case


by Sara Collin

Andy Warhol’s iconic work, known for representing well-known objects and images, was the focus of a recent fair use case surrounding possible copyright infringement. A lawyer from a Best Lawyers recognized firm weighed in.

Two images of Prince on orange and purple background

Class-Action Claims to Increase in the Wake of Societal Emphasis of ESG


by Agenique Smiley

Corporate litigators and state lawmakers anticipate a mounting rise in ESG-related issues surrounding class-action lawsuits. One Best Lawyers recognized firm is weighing in with survey data supporting this increase.

Abstract silhouettes of faces in blue, green and beige

Whistleblower Legislation Opens the Doors for More International Claims


by Justin Smulison

An Anti-Money Laundering Act, part of a recently passed Omnibus Budget in the U.S. Senate, is expanding protection for whistleblowers both domestically and internationally.

Shadow figure in spotlight against red and blue brick wall

A New Spin on Continuing Legal Education


by Sara Collin

Attorney Humira Noorestani is launching a program for continuing legal education, one that she’s dubbed the “Netflix of CLE,” allowing lawyers in the U.S. to explore legal knowledge from prominent lawyers around the world.

Hands emerging from computer and cellphone screens

Freedom to Compete


by Alyson M. St. Pierre and Ashley C. Pack

Recent movement at the federal level regarding management-labor relations mean changes to enforcement of noncompete agreements and other covenants could be imminent.

Woman in front of open blue door

Protecting High-level Executives With the Apex Doctrine


by Sara Collin

The Apex Doctrine, developed to shield high-level executives from inappropriate depositions, is a beneficial asset to lawyers and clients, at least in the states where it’s been adopted.

Apex Doctrine Protects Executives

Different Types of Business Contracts


by David Goldberg

If you're a business owner or looking at starting a new business, you'll need to know the different types of business contracts required by law.

Different Types of Business Contracts

NYC Pay Transparency Law Gets New Start Date


by Justin Smulison

This historic law regarding pay transparency in New York City originally scheduled to take effect last week was rescheduled to Fall 2022.

NYC Stand Resolute on Pay Transparency

Court-ordered Restitution for Corporate Crime Is ‘Likely Here to Stay’


by John Ettorre

Best Lawyers highlights the Mandatory Victims Restitution Act and how victims are now utilizing beyond cases of violent crime.

Push for Restitution in Corporate Crime

Will Recent Boeing Settlements Create Tailwinds In Corporate Law?


by Justin Smulison

Prominent litigation against Boeing is setting a precedent of accountability, professionalism and commitment among company boards as well as ushering ESG further into the courtroom to help monitor and prevent safety issues.

Recent Boeing Settlements and Corporate Law

Racial Discrimination Suit Against NFL May End in Arbitration


by John Ettorre

A former Miami Dolphins head coach is up against the NLF in a discrimination case that is on a path to arbitration; the NFL remains focused on equality for their diverse coaching staff.

Arbitrating Discrimination Suit Against NFL

Opioid Settlement Clears One Obstacle, but There Is More To Go


by Rasha Aly

A recent court settlement is requiring a family most notable for their production of Oxycontin to pay billions to recovery organizations, a huge win in the battle against the opioid crises plaguing the country.

Opioid Settlement with Purdue Pharma

Ketanji Brown Jackson Becomes Joe Biden’s Nominee for Vacant SCOTUS Seat


by Gregory Sirico

President Joe Biden has nominated former lawyer Ketanji Brown Jackson for the Supreme Court of the United States.

Biden Nominates Ketanji Brown Jackson

Newly Launched COVID-19 Litigation Project Offers Open Access To Pandemic-Related Court Judgments From Over 70 Countries


by Sara Collin

A worldwide database of COVID-19 cases is uniting more than 70 countries as judges, lawmakers and lawyers continue to navigate pandemic related litigation and the ways in which it’s evolving amid year three.

COVID-19 Worldwide Litigation Project

Biden’s History-Making SCOTUS Nominees


by Gregory Sirico

The promise of the first Black female Supreme Court Justice in history is on the verge of reality as the top three candidates for the most recent vacant seat are announced.

Biden Promises First Black Female SCOTUS Pick

Trending Articles

Announcing the 2023 The Best Lawyers in America Honorees


by Best Lawyers

Only the top 5.3% of all practicing lawyers in the U.S. were selected by their peers for inclusion in the 29th edition of The Best Lawyers in America®.

Gold strings and dots connecting to form US map

Announcing the 2022 Best Lawyers® in the United States


by Best Lawyers

The results include an elite field of top lawyers listed in the 28th Edition of The Best Lawyers in America® and in the 2nd Edition of Best Lawyers: Ones to Watch in America for 2022.

2022 Best Lawyers Listings for United States

2021 Best Lawyers: The Global Issue


by Best Lawyers

The 2021 Global Issue features top legal talent from the most recent editions of Best Lawyers and Best Lawyers: Ones to Watch worldwide.

2021 Best Lawyers: The Global Issue

The U.S. Best Lawyers Voting Season Is Open


by Best Lawyers

The voting season for the 31st edition of The Best Lawyers in America® and the 5th edition of Best Lawyers: Ones to Watch® in America is officially underway, and we are offering some helpful advice to this year’s voters.

Golden figures of people standing on blue surface connected by white lines

How To Find A Pro Bono Lawyer


by Best Lawyers

Best Lawyers dives into the vital role pro bono lawyers play in ensuring access to justice for all and the transformative impact they have on communities.

Hands joined around a table with phone, paper, pen and glasses

The Best Lawyers in Australia™ 2024 Launch


by Best Lawyers

Best Lawyers is excited to announce The Best Lawyers in Australia™ for 2023, including the top lawyers and law firms from Australia.

Australian Parliament beside water at sunset

How Palworld Is Testing the Limits of Nintendo’s Legal Power


by Gregory Sirico

Many are calling the new game Palworld “Pokémon GO with guns,” noting the games striking similarities. Experts speculate how Nintendo could take legal action.

Animated figures with guns stand on top of creatures

What the Courts Say About Recording in the Classroom


by Christina Henagen Peer and Peter Zawadski

Students and parents are increasingly asking to use audio devices to record what's being said in the classroom. But is it legal? A recent ruling offer gives the answer to a question confusing parents and administrators alike.

Is It Legal for Students to Record Teachers?

Inflation Escalation


by Ashley S. Wagner

Inflation and rising costs are at the forefront of everyone’s mind as we enter 2023. The current volatile market makes it more important than ever to understand the rent escalation clauses in current and future commercial lease agreements.

Suited figure in front of rising market and inflated balloon

The Upcycle Conundrum


by Karen Kreider Gaunt

Laudable or litigious? What you need to know about potential copyright and trademark infringement when repurposing products.

Repurposed Products and Copyright Infringemen

8 Different Types of Criminal Defenses in Law


by Best Lawyers

Learn about the different types of criminal defenses available in law, including innocence, self-defense, insanity and more. Protect your rights today.

Silver handcuffs laying on finger printed papers

Best Lawyers: Ones to Watch in America for 2023


by Best Lawyers

The third edition of Best Lawyers: Ones to Watch in America™ highlights the legal talent of lawyers who have been in practice less than 10 years.

Three arrows made of lines and dots on blue background

A Celebration of Excellence: The Best Lawyers in Canada 2024 Awards


by Best Lawyers

As we embark on the 18th edition of The Best Lawyers in Canada™, we are excited to highlight excellence and top legal talent across the country.

Abstract image of red and white Canada flag in triangles

Wage and Overtime Laws for Truck Drivers


by Greg Mansell

For truck drivers nationwide, underpayment and overtime violations are just the beginning of a long list of problems. Below we explore the wages you are entitled to but may not be receiving.

Truck Driver Wage and Overtime Laws in the US

Choosing a Title Company: What a Seller Should Expect


by Roy D. Oppenheim

When it comes to choosing a title company, how much power exactly does a seller have?

Choosing the Title Company As Seller

The 2024 Best Lawyers in Spain™


by Best Lawyers

Best Lawyers is honored to announce the 16th edition of The Best Lawyers in Spain™ and the third edition of Best Lawyers: Ones to Watch in Spain™ for 2024.

Tall buildings and rushing traffic against clouds and sun in sky