The South Dakota Legislature took one tentative step in the right direction this year by prohibiting health care providers from imposing non-compete clauses on doctors and nurses (see 2021 House Bill 1154). But other employers in South Dakota’s constricted market can still block skilled workers from changing gigs for up to two years.
Hmmm…if full freedom to participate in the labor market is good for doctors and nurses, it should be good for engineers, construction workers, sandwich artists, janitors, and other workers, right? President Joe Biden thinks so: he is getting ready to order the Federal Trade Commission to protect millions of American workers from these market-strangling non-compete clauses:
“[R]oughly half of private sector businesses require at least some employees to enter noncompete agreements, affecting over 30 million people. This affects construction workers, hotel workers, many blue-collar jobs, not just high-level executives,” White House press secretary Jen Psaki said during a press gaggle.
“[President Biden] believes that if someone offers you a better job, you should be able to take it. It makes sense,” she added [Oriana Gonzalez, “Biden to Sign Executive Order Curtailing Noncompete Clauses,” Axios, 2021.07.07].
Don’t look so surprised: Biden proposed eliminating non-compete clauses right after he won the 2020 election. He ran on the issue, and he spoke against non-compete clauses back when he was President Obama’s wingman:
In the spring of 2016, then-President Barack Obama issued an executive order designed to “increase competition” by calling on federal agencies to address anti-competitive behavior in their respective purviews.
Then-Vice President Biden also threw himself behind the push to end non-compete agreements.
“Folks, no one should have to sit on the sidelines because of an unnecessary non-compete agreement,” Biden said in a statement in October 2016.
“We have the most dynamic, productive workers in the world, but they can’t reach their true potential without freedom to negotiate for a higher wage with a new company, or to find another job after they’ve been laid off” [Christina Wilkie, “Biden Readies Order to Rein in Worker Non-Compete Clauses and Make Switching Jobs Easier,” CNBC, 2021.07.07].
Reduce the grit in the wheels of the economy, maximize worker potential—boy, isn’t it great having a President who really believes in the free market?
You can’t have doctors going the way of pilots.
Good news for American workers! The use of noncompete clauses has become a weapon for employers, particularly against low wage workers, and it needs to end. Courts and legislatures used to limit the application of non-compete clauses, but much less so now. Their use has become widespread, including occupations such as garage door repair technicians, dog groomers and t-shirt screen printers. Employees in low wage professions cannot afford to move to another city because a non-compete clause prohibits them from working at a similar job in the same community. Consequently, they are all too often stuck in a bad employment situation. Doing away with non-compete clauses will increase competition for good workers and better compensation.
A great move for the common man; the working, Joe Six-Pack guy who thought the former POTUS was a guy who’d look out for him. This goes to show a major difference in the two political parties. Dems care about the average “Joe” while Pubs cater so heavily toward business and the rich. Watch now, as the Pubs complain about Biden and ‘heavy over regulations’-our 3 stooges in Congress will be crying soon that it’s unfair to business.
Pubs want to see the lesser man in “his place”-subservient, quietly working to make ‘the man’ more money….
Well you know Jake our Senator wondered if Republicans would have to do something to help Joe Sixpack. Rubio isn’t the brightest but hit the nail on the head there. They sincerely like trumps attitude, the know nothing about his policies.
Good point Mark…Non compete clauses are basically unconstitutional and difficult for an employer to enforce but there are few workers who change jobs for an economic advantage who can then turn around and fight a non compete clause in court.It’s an employer’s bluff that generally works.