American Daddy Trader
  • Politics
  • Business
  • Stock
  • Editor’s Pick
  • Politics
  • Business
  • Stock
  • Editor’s Pick

American Daddy Trader

Business

Biden administration bans noncompete agreements, setting up legal showdown with business groups

by admin April 24, 2024
April 24, 2024
Biden administration bans noncompete agreements, setting up legal showdown with business groups

The Biden administration has issued a nationwide ban on the ability of employers to make their workers sign noncompete agreements, a move regulators said would help boost employee pay but which is set to be challenged in court by business groups.

In a ruling Tuesday afternoon, the Federal Trade Commission (FTC) said noncompete clauses would henceforth be illegal. The measure was necessary, it said, for ‘protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation.’

“Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism,” said FTC chair Lina M. Khan in a statement. “The FTC’s final rule to ban noncompetes will ensure Americans have the freedom to pursue a new job, start a new business, or bring a new idea to market.”

The FTC estimates nearly one in five Americans are subject to noncompetes. They have grown increasingly common in lower wage or hourly work industries like fast food franchises, restaurants, and security firms, where some employers have sought to limit the ability of workers to effectively raise their pay by looking for work at competing establishments.

In addition to banning all new noncompetes, the FTC’s rule applies to all existing noncompete agreements. Employers will now have to provide notice to workers bound to a current noncompete that it will not be enforced against them.

The rule was hailed by labor groups and left-leaning policy experts.

‘Noncompetes are about reducing competition, full stop. It’s in their name,’ said Heidi Shierholz, president of the progressive nonprofit Economic Policy Institute. ‘Noncompetes are bad for workers, bad for consumers, and bad for the broader economy. This rule is an important step in creating an economy that is not only strong but also works for working people.’

The AFL-CIO, America’s largest labor group, praised the new rule in a post on X Tuesday, saying noncompete agreements ‘trap workers from finding better jobs, drive down wages, and stifle competition.’

But business groups are already hitting out at the ban, saying noncompetes are essential to protecting trade secrets and proprietary information. The groups also say noncompetes ultimately help workers by engendering a more collaborative firm environment and limiting so-called ‘free riders,’ or employees who seek to capitalize on a specific company’s methods and taking that knowledge elsewhere.

The U.S. Chamber of Commerce, the country’s largest business lobby, said it plans to sue the FTC over the ruling. In a statement, it called the ban an ‘unlawful power grab.’

“This decision sets a dangerous precedent for government micromanagement of business and can harm employers, workers, and our economy,’ it said. 

Separately. a Dallas-based tax services firm filed a lawsuit in Texas federal court — which has proven hostile to Biden administration rulings — challenging not only the ban but the very structure of the FTC itself.

‘We stand firm in our commitment to serve the rightful interest of every company to retain its proprietary formulas for success taught in good faith to its own employees,” said chairman and CEO G. Brint Ryan said in a statement.

The FTC’s rule is set to go into effect in August, but is unlikely to be enforced until the court challenges are resolved, something that could take years.

This post appeared first on NBC NEWS

previous post
Equities Struggle in Strong “NoGo” as Materials try to Curb the Damage
next post
Tesla’s affordability push eases growing doubts about its performance and Musk’s focus

You may also like

Reddit pops 48% in NYSE debut after selling...

March 27, 2024

Barcelona protesters throw items and spray travelers with...

July 10, 2024

Disney CEO Bob Iger vanquishes billionaire foe Nelson...

April 4, 2024

Fed chair Jerome Powell: No sign of stagflation...

May 2, 2024

On air, ’60 Minutes’ reporter says ‘none of...

April 29, 2025

Boeing ‘disappointed’ customers but is on the path...

July 23, 2024

Starbucks is reeling as customers go elsewhere, sales...

August 1, 2024

‘It is time to break up Live Nation’:...

May 24, 2024

Private payrolls increased by 192,000 in April, more...

May 2, 2024

Trump moves to develop sovereign wealth fund to...

February 5, 2025

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Senate GOP barrels past blockade to advance nearly 100 Trump nominees

      December 11, 2025
    • Trump says US seizes massive Venezuelan oil tanker as showdown with Maduro erupts into new phase

      December 11, 2025
    • Moderate Republicans stage Obamacare rebellion as health cost frustrations erupt in House

      December 11, 2025
    • Trump admin weighs terrorism sanctions against UN Palestinian aid agency over Hamas allegations

      December 11, 2025
    • Ukrainian woman charged over Russian-backed cyberattacks; $10M reward offered for others

      December 11, 2025

    Archives

    • December 2025
    • November 2025
    • October 2025
    • September 2025
    • August 2025
    • July 2025
    • June 2025
    • May 2025
    • April 2025
    • March 2025
    • February 2025
    • January 2025
    • December 2024
    • November 2024
    • October 2024
    • September 2024
    • August 2024
    • July 2024
    • June 2024
    • May 2024
    • April 2024
    • March 2024
    • February 2024
    • January 2024

    Categories

    • Business
    • Editor's Pick
    • Politics
    • Stock
    • Uncategorized
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Copyright © 2025 americandaddytrader.com | All Rights Reserved