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President Biden Signs Executive Order Regarding Non-Competes

On Friday, July 9th, President Biden issued an Executive Order (EO) covering a range of issues related to economic competition, including a directive aimed at employee non-compete agreements. The EO "encourages" the Federal Trade Commission (FTC) to limit or ban non-compete agreements.

It remains to be seen whether the FTC or any other federal agency will act on the non-compete directive and, if so, the scope of any rulemaking (e.g., might more leeway be given where employees possess trade secret or other confidential information). Even if change does not occur at the federal level, the directive may drive state and local level legislation as more states enact measures to restrict the use of non-competes. For instance, the Illinois legislature just recently passed a law containing sweeping changes for new non-competes. My colleagues have written about those changes here.

According to the EO, "[r]oughly half of private-sector businesses require at least some employees to enter non-compete agreements[.]"


non-competes, l&e, legal