ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Monday, February 13, 2023

The State of the Union and Non-Competes

Screenshot 2023-02-11 at 7.14.47 PMI have been writing a lot lately about non-competes.  So I was a bit annoyed when that word showed up as a pangram on Saturday.  First off, I was annoyed because I think it's hyphenated, and Sam Ezersky doesn't usually allow us to use hyphenated words.  Worse, it was one of five pangrams on Saturday.  It was the only one that I didn't get, and my non-lawyer wife got it!!!  Argh.  She is the poet in the family, and of course I don't lord it over her when I find 'villanelle" or "iambic" any more than the situation requires, but I will never hear the end of this one.  Ugh. 

There was some consolation.

Screenshot 2023-02-12 at 5.31.04 AM

Segueing from the state of the Spelling Bee to the State of the Union, friend of the Blog, Timothy Murray shared with us the following excerpt from last week's State of the Union Address, which touches on a subject (non-competes) that we blogged about recently here and here:

fJoe_Biden_presidential_portraitFor too long, workers have been getting stiffed, but not anymore.

We’re beginning to restore the dignity of work.

For example, I should have known this but I didn’t until two years ago: 30 million workers had to sign noncompete agreements with the jobs they take. Thirty million. So a cashier at a burger place can’t walk across town and take the same job at another burger place to make a few bucks more. It just changed — well, they just changed it because we exposed it. That was part of the deal, guys. Look it up.

But not anymore.

We’re banning those agreements so companies have to compete for workers and pay them what they’re worth.

Tim Murray wonders how many cashiers are going to benefit from the administration's plan to prohibit non-competes.  If they are subject to non-competes, are the burger joints of the world really enforcing them?  I have had encounters with hair stylists/barbers who work for places like HairCuttery or SuperCuts and are made to sign non-competes.  I think those might be enforced or they might have an in terrorem effect rendering enforcement unnecessary.   It will be interesting to see how service industries adjust if the new FTC rule goes into effect.

As we will see in Wednesday's post, the response has already begun.

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