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President Biden takes aim at anti-poaching agreements

The executive order gives restaurant employees fewer restrictions on the jobs they can take. Fast-food concepts are one of the intended targets.
Photograph: Shutterstock

Restaurant employees will face fewer legal restraints on changing jobs under an executive order that President Biden signed into effect Friday.

The measure directs the whole of the federal government to limit or ban any restrictions a restaurant or other employer might impose to keep a worker or salaried employee from jumping to a competitor.

It would also effectively outlaw the anti-poaching clauses that are included in some restaurant franchise agreements to prevent one licensee from raiding the staff of another operator within the same chain, be it the franchisor or a fellow franchisee.

The stipulations are among the 72 policy changes that Biden is mandating from his administration in an effort to bolster competition within the American business community. The president contends that scuttling long-held business conventions such as non-compete agreements and so-called anti-poaching provisions will lift compensation levels by encouraging employers to bid against one another for key hires.

The executive order also directs the Department of Justice and the Federal Trade Commission to slow consolidation across all industries by being choosier in what mergers they allow to proceed.

Other provisions are intended to drive down prices by eliminating costly steps in getting products into buyers’ hands. For instance, the executive order eliminates the need for a doctor’s prescription to buy a hearing aid.

Few of the initiatives have a direct relevance to restaurants. But the White House specifically cited the fast-food business as one of the industries that should be affected by the loosening of restrictions on a job hunter’s prospects. It also set the elimination of non-competes and anti-poaching provisions as one of the three components of the bill that are the highest priorities.

"There were clauses in McDonald’s contracts: You can’t leave Burger King to go to McDonald’s," Biden remarked in signing the executive order. "Come on.  Is there a trade secret about what’s inside that patty?  I’m serious."

The executive order intends to continue fostering competition by creating a White House Competition Council, led by the director of the National Economic Council.

UPDATE: This story has been updated with comments from President Biden at the signing of the executive order Friday afternoon. 

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