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President Biden Seeks to Limit Non-Compete Agreements

Client Alert

Today, President Biden announced he would issue an Executive Order that calls on the Federal Trade Commission (FTC) to adopt rules to curtail worker non-compete agreements. Interestingly, a week ago, the FTC approved changes to its Rules of Practice to modernize and expedite the way it issues Trade Regulation Rules. 

If you have followed our alerts, we predicted the elimination of non-competes would probably happen. In 2016, then-Vice President Biden was a vocal opponent against non-compete agreements. He led the Obama administration’s initiative seeking to limit or eliminate non-compete agreements. In his presidential campaign, Biden promised to “work with Congress to eliminate all non-compete agreements, except the very few that are absolutely necessary to protect a narrowly defined category of trade secrets....”

Since this is not an act of Congress, the question will be the extent and timing of any FTC rules.

The FTC enforces and administers a wide variety of federal consumer protection laws and regulations that prevent fraud, deception, and unfair business practices. It also develops policy initiatives on issues that affect competition, consumers, and the U.S. economy. 

Once the Executive Order is issued, it will be interesting to determine the authority under which the FTC will issue its rules. We anticipate that the FTC will assert authority under its broad power to protect consumers from unfair or deceptive acts or practice (“UDAP”) and unfair methods of competition (“UMC”). On January 9, 2020, the FTC held a workshop to examine whether there is a sufficient legal basis and empirical economic support to promulgate an FTC rule that would restrict the use of non-compete clauses in employer-employee employment contracts. After the workshop, the FTC extended the public comment period through March 10, 2020, but the Commission has not issued any subsequent guidance on the subject.

Stay tuned for additional information. With the announcement of the Executive Order, the outcome of the FTC non-compete analysis should soon be released. 

For additional information or strategic planning on non-competes or other restrictive covenants, contact Jeffrey C. Miller, jcmiller@bmdllc.com 216.658.2323 or any member of the BMD L+E team.


NLRB Issues Final Rule on Joint-Employer Status

On October 26, 2023, the National Labor Relations Board (NLRB) issued its final rule on determining joint-employer status, departing from its prior 2020 standard. The final rule provides that two or more entities may be considered “joint employers” if each entity has an employment relationship with employees and if the entities share or codetermine one or more employees’ essential terms and conditions of employment. The final rule goes into effect on December 26, 2023, and will only be applied to cases filed after the effective date.

WEBINAR SERIES RECAP | Employment & Labor

BMD Partner and Co-Chair of the Employment & Labor Law Group, Bryan Meek, presented this four-part webinar series on trending topics in employment law.

Ohio Legalizes Recreational Marijuana; What’s Next for Ohio Employers?

Recent Changes to the No Surprises Act’s Federal IDR Process

Proposed changes to the No Surprises Act’s independent dispute resolution (IDR) process were recently issued by the Department of Health and Human Services, Department of Labor, Department of Treasury, and the Office of Personnel Management. The October 27, 2023, proposed rule overhauls the current Federal IDR process in an effort to create efficiencies and reduce delays relating to eligibility determinations and address feedback from interested parties and certified IDR entities.

What Inpatient Behavioral Health Providers Need to Know About ODM's New Draft Rule for Reimbursements

Ohio Department of Medicaid (ODM) recently released a draft rule that will transform how inpatient behavioral health services are reimbursed for some hospitals. ODM will migrate inpatient payments for behavioral health and substance use disorder services (BH/SUD) provided by freestanding psychiatric hospitals (FSPs) from the APR-DRG payment methodology to a per diem payment methodology derived from the APR-DRG system.