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Biden FTC Bans Non-Compete Agreements

Meanwhile, the Biden people just can’t stop regulating:

On a 3-2 party-line vote the FTC adopted a blanket ban on all non-compete agreements. The US Chamber immediately announced a lawsuit.

Since its inception over 100 years ago, the FTC has never been granted the constitutional and statutory authority to write its own competition rules. Noncompete agreements are either upheld or dismissed under well-established state laws governing their use. Yet, today, three unelected commissioners have unilaterally decided they have the authority to declare what’s a legitimate business decision and what’s not by moving to ban noncompete agreements in all sectors of the economy.

States have a lot of different approaches to noncompete agreements, but most allow them at least for sophisticated high-wage and executive positions because they allow companies to invest in human capital without the investment immediately benefiting a competitor. Any changes should be debated and duly enacted in state legislatures.

Under the Biden FTC order, a company could not agree to pay for your graduate degree in exchange for you agreeing not to work for a competitor. How can such an arrangement be made illegal in a free society? How does this benefit workers?


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