While you weren’t looking, the Biden administration ended involuntary servitude
It happens so seldom that when labor does get a victory it is often overlooked. In the era of multi-billionaires and Mergers & Acquisitions worth hundreds of billions victory that may put a few more bucks in the workers pocket is almost not news worthy.
But once again, the Biden Administration is looking out for all of us little guys. Cutting through the decades of rules that have screwed workers is a daunting task. However every once in a while we get a bone thrown our way.
Last week amid the grand embarrassment of Republicans publicly humiliating their new leader the Biden Administration rolled back the rules on non-compete agreements. Once the domain of top level management, it seems that everyone down to the lowliest janitor has to sign one these days.
Robert Reich in his substack newsletter tells us that the days of the non-compete agreement may be coming to an end:
Some 30 million Americans are trapped by contracts that say if they leave their current job, they can’t take a job with a rival company or start a new business of their own. These clauses deprive workers of higher wages and better working conditions. In effect, they’re a form of involuntary servitude.
Last week, while America was fixated on Kevin McCarthy’s travails, the Federal Trade Commission proposed a sweeping new rule that would ban these non-compete agreements.
This is a big deal. The FTC estimates that such a ban could increase wages by nearly $300 billion a year (about $2,000 per worker, on average) by allowing workers to pursue better job opportunities.
Non-competes also harm the economy as a whole, depriving growing businesses of talent and experience they need to build and expand. As historian Margaret O’Mara noted (via Matt Stoller), California’s ban on non-competes was a major reason for Silicon Valley’s success.
The rule isn’t a sure thing. The public has 60 days to offer comment on it, after which a final rule could be published and then enforced some months after that. If you wish to leave a comment, here’s the link: https://www.regulations.gov/docket/FTC-2023-0007/document.
As Reich notes, this rule change has a tough path to become a rule, but at least there is a bit of light at the end of the tunnel. Please, if you have any input let the FTC know. This is a rule that needs to be changed.