Would an FTC Ban on Non-Compete Agreements Lead to Higher Wages for American Workers?

Abstract

There has been a potentially significant new development in the field of employee compensation, specifically as it relates to the use of non-compete agreements and their effect on wages for the average American worker. The Biden Administration issued an Executive Order in July 2021, urging the Federal Trade Commission to consider banning most non-competes; especially those acting as a restriction on job mobility and wage growth for low and moderate wage workers. Non-competes have become a widely-discussed issue due to the significant increase in their use by employers for a lower-wage employees. This article discusses the recent expansion in the use of non-competes, and examines the effect of their expanded use on wages for the average rank and file worker, including a discussion of the Biden Executive Order, and the possibility of federal action regulating the use of non-competes for the average American worker.