WH Will Release Executive Order Aimed At Limiting Noncompete Agreements

A 'Help Wanted' sign is posted beside Coronavirus safety guidelines in front of a restaurant in Los Angeles, California on May 28, 2021. - Following over a year of restrictions due to the coronavirus pandemic, many j... A 'Help Wanted' sign is posted beside Coronavirus safety guidelines in front of a restaurant in Los Angeles, California on May 28, 2021. - Following over a year of restrictions due to the coronavirus pandemic, many jobs at restaurants, retail stores and bars remain unfilled, despite California's high unemployment rate, causing some owners to fear they will not be able to fully reopen by the June 15th date California has given for a full reopening of the economy. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images) MORE LESS
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July 7, 2021 11:58 a.m.

The White House is set to release an executive order that gives workers the upper hand in a job market that is recovering from the wreckage of the COVID-19 pandemic.

The New York Times reported on Wednesday that the White House plans to release an executive order centered on competition policy, including restrictions on the use of noncompete agreements. People familiar with the order told the Times that one section contains several provisions aimed at increasing competition in the labor market.

A source familiar with the order confirmed the Times’ report to TPM on Wednesday. The source told TPM that the executive order can be “expected in the coming days.”

The order will suggest the Federal Trade Commission nix or restrict noncompete agreements — a business practice that employers have used to deter workers from quitting to trade up for a better job. Additionally, it encourages the FTC to ban “unnecessary” occupational licensing restrictions that pose obstacles for job seeking workers, especially across state lines.

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The order also encourages the FTC and Justice Department to restrict employers from sharing information on worker pay — a tactic that may lead to collusion.

The executive order would direct antitrust regulators to take the effect of mergers on workers into account. Mergers potentially contribute to what is known as “monopsony,” which leaves workers with few options of where to work, and therefore gives them less leverage to negotiate higher wage or better benefits.

The Times noted that White House’s planned order is the most concerted effort in recent years of the federal government using its bully pulpit to give workers more leverage in the job market.

The order comes amid an economy in flux — job openings are on the rise alongside significant rates of workers quitting their jobs. The Bureau of Labor Statistics reported that while there were 9.3 million job openings in April, almost 4 million people, or 2.7 percent, had also quit their jobs that month. On Wednesday, the BLS reported little change in job openings and labor turnover in May, with 9.2 million job openings and a slight decrease in the quits rate to 2.5 percent.

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