Non-compete executive order is horrible policy

On Friday, President Joe Biden unveiled an executive order which makes recommendations to the FTC which are intended to increase competition. Among these recommendations was a suggestion to ban or limit non-compete agreements. If non-competes were entirely banned (which they almost certainly won't be), it would be one of the worst economic policy failures in recent times. All sorts of situations in M&A and asset management where trade secrets are highly important and need to be safeguarded. With that being said, I would likely support limitations on non-competes where M&A and trade secrets are not concerned. Just wanted to get the Oasis' thoughts.

 

My dad got a non-compete agreement when he was fired but they paid three years of salary. 

 

My post was particularly directed toward non-competes in an M&A context. I agree with you as it relates to workers without any change in ownership. But imagine you’re a buyer of a $5MM business in an industry where a seller can easily start up the same thing again. What is there to protect you in such a situation if not a non-compete? If you take away non-competes, a lot of deals simply won’t happen, leaving sellers with less liquidity and the markets less efficient overall.

 

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