The Biden Administration is making ardent efforts to stop non-competition agreements. These documents are commonly included in the hiring process, and they might keep workers from looking for new jobs or starting their own companies. If you’re a Texas resident working in the restaurant industry, here are some important things you should know about non-competition agreement contracts and disputes as it pertains to job security.
The president’s executive order
In July, President Biden signed an executive order for the Federal Trade Commission to limit or prohibit the use of non-compete agreements in employment contracts. The president’s order was part of a larger effort to promote economic competition in the U.S. and provide funding to lower concentration in the country’s food supply chain.
When there is competition in the labor market, workers are empowered to ask for higher wages and experience more confidence while in the workplace, according to a White House press release. Companies can stifle economic growth with non-compete clauses, so it is important for employees to know the details of non-competition agreement contracts and disputes.
Non-compete contracts and the restaurant industry
Non-competition agreement contracts and disputes are common in the restaurant industry, and these contracts have reportedly restricted workers in several capacities in the last few years. The terms of these contracts vary by region, but one labor study published in April 2021 estimated that about one in six food preparation or service employees was bound by a non-competition contract. The survey was based on a survey of almost 67,000 employees.
Non-compete provisions often keep workers from leaving a job to work for a competitor or to start a competing company within a specific time frame or region. Proponents of the president’s executive order hope that removing non-compete agreements will bolster economic activity.