Progressives urge Biden to ban non-compete agreements everywhere he can

Earlier this year, the Federal Trade Commission proposed a Historic Ban on Non-Compete Agreements, which would outlaw companies from preventing their workers from taking jobs at competing companies. But there are several important fields, including the airline industry, where the FTC may not have the authority to implement it.

Progressives say they have a solution: They want President Joe Biden to implement similar bans through federal agencies, like the Department of Transportation, so that non-competition is banned throughout the economy.

Eleven think tanks and advocacy groups sent a letter to the white house on Tuesday urging the president to take this approach to bolster the FTC’s effort. They called non-compete agreements “one-sided and exploitative employment contracts” that should be restricted wherever possible.

“There is no defensible reason why these industries should be exempt from the ban on non-compete agreements,” the groups wrote to Lael Brainard, director of Biden’s National Economic Council. “Employees of financial institutions, airlines, utilities, Internet service providers, oil and gas pipelines, railroads, meatpacking companies, and nonprofit health care systems should have the same protections as these coercive labor contracts.”

The groups, which include the American Economic Freedoms Project, the Economic Policy Institute and the Open Markets Institute, said Biden should implement a “whole-of-government approach” to the non-compete issue.

Those who do not compete lock workers in their jobs at the same time. prohibiting them from taking similar positions at other employers for a certain amount of time after they quit or are fired. The agreements have been criticized by politicians and regulators because of the way they limit mobility in the labor market and cap wages.

The independent FTC submitted its proposed rule in January, but has not finalized it. The agency projects that the rule would increase wages by up to $296 billion per year by forcing employers to compete more for workers.

But the commission, which is headed by FTC Chair Lina Khan, a progressive Biden appointee, noted in its proposed rule that under antitrust law, it does not have jurisdiction in all sectors.

Therefore, “certain banks, savings and loans, federal credit unions, common carriers, air carriers, and foreign air carriers” could be exempt from the final rule when it is issued.

The rule also said that it cannot be applied to organizations that are not “organized to conduct business for their own benefit or that of their members,” that is, nonprofit employers.

In their letter, the groups said they are particularly concerned that large nonprofit health care systems could be excluded from the rule. Noncompete is commonly used in the health care field, and doctors, nurses, and other workers may not accept positions with competing hospitals or groups. They referred to a magazine article that estimated up to 80% of certified registered nurse anesthetists were subject to non-competition.

To prevent broad exclusion in the health care industry, the groups recommended that the Department of Health and Human Services create a rule prohibiting non-competition in any organization that accepts Medicare reimbursement.

They also said the Department of Transportation should enact a rule barring airlines from implementing “training payment agreement provisions,” which require workers to pay training money when they leave a job. HuffPost previously reported on a pilot who was forced to pay his airline $20,000 when she quit. In its proposed rule, the FTC says it views such contracts as a form of non-compete agreement that violates antitrust law.

The FTC recently allowed the public to comment on its proposal to ban non-compete, a formal step before a federal agency finalizes a rule. Nearly 27,000 comments were submitted, the vast majority of which appeared to support the agency’s efforts.

like a commentator put it, “It is about time that these onerous (sic), ridiculous and ANTI-COMPETITIVE non-compete clauses are eliminated. They only serve the interests of the monopolies, while harming workers, consumers and communities.”