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Breaking News on Restrictive Covenants: What Does President Biden’s Executive Order on Non-Competes Mean for Employers?

Many businesses rely on non-compete agreements and other restrictive covenants to protect their proprietary information or business strategies. Recently, President Biden issued a lengthy Executive Order on Promoting Competition in the American Economy which directs the Federal Trade Commission, along with other agencies, to ban or limit “non-compete agreements and other clauses … that may unfairly limit worker mobility” through rulemaking.

The Biden administration’s Order takes aim at agreements that “unduly limit workers’ ability to change jobs” and make it harder for workers to bargain for higher wages and better working conditions. The Executive Order does not immediately limit non-compete provisions or other clauses that limit worker mobility. The “other clauses” language could take aim at non-solicitation clauses, no-hire provisions and other types of restrictive covenants.

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