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Biden administration aims to limit non-compete agreements

By Janet A. Hendrick and Martin J. Lopez III

This article appeared as a Guest Column in The Journal Record on July 14, 2021.

attorneys Martin J. Lopez III and Janet A. Hendrick

Martin J. Lopez III and Janet A. Hendrick

On July 9, President Biden issued Promoting Competition in the American Economy, a sweeping policy-based executive order that purports to encourage innovation and competition in the American workplace. Earlier that day, the White House issued a press release addressing the initiatives, one of the most notable being a goal of “banning or limiting non-compete agreements and unnecessary, cumbersome occupational licensing requirements that impede economic mobility.”

Although non-competes and similar restrictive covenants are banned or limited in a handful of states, including Oklahoma, they remain alive and enforceable in most states, including Texas, as long as they meet certain requirements – generally that they are reasonable in time and territory and necessary to protect a legitimate business interest. A 2016 U.S. Department of the Treasury report cited data showing that 15% of workers without a four-year college degree were subject to non-competes, as were 14% of workers bringing home less than $40,000 per year. The Biden administration claims that “[c]ompetition in labor markets empowers workers to demand higher wages and greater dignity and respect in the workplace” and that “[r]oughly half of private-sector businesses require at least some employees to enter non-compete agreements, affecting some 36 to 60 million workers.”

So, does the Biden administration’s executive order prohibit or limit non-competes? The short answer is “no” or at least “not yet.” The executive order creates the White House Competition Council and directs federal rulemaking authorities to consider competition-related issues. Specifically, the order asks the Federal Trade Commission to exercise its statutory rulemaking authority to curtail what it deems “the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.”

President Biden’s recently confirmed FTC chair, Linda Khan, appears to be a zealous advocate of the goals of the executive order, at least as it relates to the use of non-compete agreements in the employment context. In a 2019 law journal article, she took the position that non-compete agreements “deter workers from switching employers, weakening workers’ credible threat of exit, and diminishing their bargaining power” and suggested that “the FTC might consider engaging in rulemaking on this issue.”

While such rulemaking is a possibility, it is unclear to what extent the FTC will address the issue. The administration will also certainly face multiple legal challenges by businesses, leading some to predict the FTC will approach this rulemaking cautiously.

Phillips Murrah’s Labor and Employment attorneys continue to monitor this development.


Janet Hendrick portrait

Janet Hendrick is a Director and member of the Firm’s Labor and Employment Practice Group.

For more information on this alert and its impact on your business, please call 469.485.7334 or email me.

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Hendrick presenting at 2021 Texas Diversity Equity & Inclusion Conference

Janet Hendrick, a Shareholder in Phillips Murrah’s Dallas office, will present at the 6th Annual Texas Diversity Equity & Inclusion (DEI) Conference on June 16, 2021. The conference will run from June 15-17 and is sponsored by Toyota, Texas Capital Bank, Southwest Airlines, Parkland Hospital, and other partners.

Janet Hendrick

Janet Hendrick is a Director and member of the Firm’s Labor and Employment Practice Group.

Hendrick will discuss “The Future of DEI Efforts: What We’ve Learned and How Companies Can Do Better,” with the goal of informing attendees on the state of DEI efforts, including what the events of 2020 have taught us and how companies can make their DEI efforts more effective.

“2020 brought many changes in the workplace, including an increase in DEI initiatives,” Hendrick said. “While many companies have ramped up their efforts, studies show DEI initiatives are still falling short of accomplishing necessary change in the business world. In this session, we will discuss the impact of 2020 events on DEI efforts, advances in DEI, and what’s ahead for DEI in the workplace.”

Conference attendees will network with other business professionals from around the state, hear remarks from national speakers about the importance of diversity in the workplace, and attend breakout sessions designed to help businesses to grow and thrive.

Janet Hendrick is an experienced employment lawyer who frequently speaks on matters relating to diversity and inclusion. She is also a member of the North Texas LGBT Chamber of Commerce’s Governing Committee.

For more information about the conference, visit the North Texas LGBT Chamber of Commerce’s website here.

Phillips Murrah Shareholder Janet A. Hendrick elected as Fellow of the Texas Bar Foundation

Phillips Murrah Director Janet Hendrick elected to Texas Bar Foundation

Phillips Murrah Shareholder Janet Hendrick elected as Fellow of the Texas Bar Foundation

Phillips Murrah Shareholder Janet A. Hendrick has been elected as a member of the Fellows of the Texas Bar Foundation. Attorneys elected as Fellows of the Foundation have demonstrated outstanding professional achievement and commitment to the improvement of the justice system throughout the state of Texas. Election is a mark of distinction and recognition of Janet’s contributions to the legal profession.

“It is my absolute privilege and honor to be elected as a Fellow of the Texas Bar Foundation,” said Janet. “I look forward to working with other Fellows to continue the important work of the Foundation.”

Selection as a Fellow of the Texas Bar Foundation is restricted to members of the State Bar of Texas. Each year the top one-third of one percent of Texas attorneys are invited to become Fellows. Once selected, nominees must be elected by the Texas Bar Foundation Board of Trustees.

The Texas Bar Foundation is the largest charitably funded bar foundation in the country. Founded in 1965 by lawyers determined to assist the public and improve the profession of law, the Texas Bar Foundation has maintained its mission of using the financial contributions of its membership to build a strong justice system for all Texans. To date, the Texas Bar Foundation has distributed more than $20 million throughout Texas to assist nonprofit organizations with a wide range of justice-related programs and services.

To contact Janet, click HERE to visit her website bio, or reach out to her at the following information:

Janet A. Hendrick, Shareholder in Phillips Murrah’s Dallas office
EMAIL: jahendrick@phillipsmurrah.com
PHONE: 214.615.6391

For more information about the Texas Bar Foundation, please visit: www.txbf.org.

Hendrick partners with North Texas LGBT Chamber of Commerce

Janet Hendrick

Janet Hendrick is an experienced employment litigator who tackles each of her client’s problems with a tailored, results-oriented approach.

Director Janet A. Hendrick joins the North Texas LGBT Chamber of Commerce, supporting the organization for 2019-2020 as a Bronze Partner and taking on a hands-on role.

“I met the President of the Chamber, Tony Vedda, at the Dallas Business Equality Conference a few years ago, where I was asked to speak about evolving rights for LGBT employees in the U.S.,” she said. “We stayed in touch and he later asked me to be a member of the Chamber’s Governance Committee, the role of which is to assist in selection of the Chamber’s Board of Directors.

“I spoke again this year at the Business Equality Conference, which is sponsored by progressive Dallas-based companies like Toyota, Southwest Airlines and American Airlines.”

Janet is an experienced employment litigator who regularly appears in state and federal court to defend employers of all sizes against discrimination, harassment, retaliation, and related claims. She is a frequent speaker and author on topics including gender diversity in the legal profession, workplace accommodations and leave management, evolving workplace protections of LGBT employees, and the rapidly expanding gig economy.

The North Texas Lesbian Gay Bisexual Transgender Chamber of Commerce has been the premier business organization for the LGBT community in north Texas since 2005, working to improve the region’s economic vitality and support the positive attributes of a diverse workplace, supply chain and community.

To learn more about the North Texas LGBT Chamber of Commerce and its mission, click here.