President Biden Issues Yet Another Executive Order to Promote Competition in the US Economy
On July 9, 2021, President Joe Biden issued an executive order to promote competition in the American economy. As stated by the accompanying fact sheet, the order’s objectives include reducing the trend of corporate consolidation, increasing competition and delivering concrete benefits to America’s consumers, workers, farmers and small businesses.
One aspect of this Executive Order that is worth tracking from a risk management and HR perspective is the President's call to ban or limit non-compete agreements. The President asked for Congress to pass the Protecting the Right to Organize (PRO) Act to ensure workers have a 'free and fair choice' to join a union and to collectively bargain. The White House feels Unions are critical to empowering workers to bargain with their employers for better jobs and to creating an economy that works for everyone.
However, industry experts recommend that employers take time now to review, at the very minimum, their use of restrictive covenant agreements and evaluate how this order may impact their practices.
Politics aside, the impact of this potential legislation will be far reaching and could dramatically impact the private sector in many adverse ways. Here are a few items worth discussing with your leadership team:
How could this impact current non-competes already in place?
If your company invests significant time and money to train employees, what could the financial impact of these folks being poached by your competition have on your company (with no agreement to protect company clientele).
What are creative ways to implement 'golden handcuffs' to incentivize talented employees to remain with your company?
How can you protect your clientele and revenue streams in the event employee non-compete agreements become unenforceable?
What internal policies and procedures need to be changed or adjusted to conform to this new legislation?