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Tuesday, July 13, 2021

Biden Issues Exec Order on Competition (with focus on non-competes!)

This week, President Biden issued an executive order on promoting competition in the American Economy. The first item of action is a call to ban or limit non-compete agreements and unnecessary, cumbersome occupational licensing requirements that impede economic mobility. This, including Biden's call on the FTC to take action, follows what Mark Lemley and I recommended in our 2021 Day One Report. 

This has been a long time coming. In January 2020 I spoke at the FTC about the need to intervene in the labor market to protect competition, and in 2016 I served on President Obama's working group that resulted in a presidential call to action to the states to curtail the spread of noncompetes. A federal rule will be a gamechanger.

I spoke to the LA Times and the Wall Street Journal about the order. Here's some of the Times article:

Orly Lobel, a professor at the University of San Diego School of Law who has studied the effects of noncompete clauses for years, said that this shift in policy is “very significant” for the U.S. labor market. Based on California’s record on attracting top talent, “we have all the evidence empirically that this comparative advantage contributes not only to higher wages and worker mobility, but also a win-win for firms,” Lobel said.

“When there’s more competition, there’s more of an incentive to innovate, better fit between talent and jobs, and people don’t stagnate in the same position,” Lobel added.

Lobel, the University of San Diego law professor, said that Friday’s approach of calling on the FTC to create a federal rule is a stronger step, and one that she believes falls within the FTC’s powers.

“It’s squarely within the charge of the FTC to regulate unfair practices,” Lobel said, and that includes the labor market. “Wage fixing is just as unfair as price fixing — all of those are unlawful, and we should tackle them.”

 

Posted by Orly Lobel on July 13, 2021 at 06:04 AM | Permalink

Comments

It has taken a while for this to happen. I spoke at the FTC in January 2020 on the necessity for labor market intervention to defend competition, and in 2016, I was a member of the working group that produced President Obama's call to action to the states to stop the proliferation of noncompete agreements. A government regulation will alter the situation.

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Posted by: pawan singh | Aug 6, 2021 12:18:08 AM

Mr. Biden's action targets monopolies in a wide range of industries, and includes 72 initiatives that he wants more than a dozen federal agencies to implement.

This executive order directs antitrust agencies to focus on the labor, health, technology, and agriculture sectors while they address a https://jigsawpuzzle.io/ range of issues that have irked consumers, and specifically in medicine prices, which have destroyed some people's fortunes.

Posted by: kessler dianna | Jul 13, 2021 11:32:16 AM

Important post.

But the executive order, doesn't address in more specific terms, the issue of intellectual property (employers). What it does, is to state, in very broad terms that it would:

" Make it easier to change jobs and help raise wages by banning or limiting non- compete agreements...."

For otherwise, it would have to survive federal courts scrutiny. Chances are not so great in this regard. Employers here, are also abused. It would eliminate incentive for innovation either, and violating so, fundamental constitutional rights.

By the way, he does mention small business and big corporations, and confuse it with bad consolidations. Well, big firms or even huge corporations is good. Made America what it is ( international competition and innovation). Bad or over consolidations, that is bad. Abusing so markets, competition, and consumers. Yet, not to confuse them both.

Thanks

Posted by: El roam | Jul 13, 2021 9:20:38 AM

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