In his State of the Union address Tuesday, President Joe Biden falsely claimed that “burger place” cashiers had been forced to sign non-compete agreements before his administration banned the practice.
“Thirty million workers had to sign non-compete agreements for the jobs they take. Thirty million.
“So, a cashier at a burger place can’t walk across town and take the same job at another burger place and make a few bucks more. They just changed it because we exposed it.”
“That was part of the deal, look it up,” Biden insisted when his claim prompted jeers from the audience.
“But not anymore. We’re banning those agreements where companies have to compete for workers and pay them what they’re worth,” Biden added.
However, even liberal CNN’s fact-check acknowledges that burger joint workers were not being forced to sign non-compete agreements preventing them from taking jobs a competitor.
Likewise, when then-Candidate Biden made a similar claim in 2020, PolitiFact declared his claim “false”:
“‘McDonald’s is making billions of dollars, but here’s the deal,’ Biden said July 22. ‘They’ve made you all sign noncompete contracts that you cannot go across town to try to get a job at Burger King. And maybe, and I’m not saying you could, but you get 25 cents an hour more. People who are hourly workers are required to sign noncompete: ‘I will not go anywhere to any business like the one I’m in to get a raise.’
“Line employees at McDonald’s franchises don’t command high wages, but Biden was wrong about the use of noncompete contracts.”
Both the CNN and PolitiFact fact-checks note that Biden may have been confusing “no-poaching” agreements with “non-compete” agreements.
As Until 2018, some fast-food chains had prohibited one of their franchises from poaching employees from another one of their franchises, but they didn’t prevent employees from getting a job at a competitor.
But, even that practiced ended in 2018, when Washington State Attorney General Bob Ferguson obtained legally-binding agreements ending the practice, not just in his state, but nationwide.
What’s more, when comes to requiring non-competes, companies have not “just changed, it because we exposed it.”
“That was part of the deal, look it up,” Pres. Biden challenged his audience.
But, if you do “look it up,” you’ll find that the Federal Trade Commission has announced a “proposed” rule – not a final rule – to end any new non-competes and rescind all current ones.
The FTC is accepting comments on the proposed rule until March 20, 2023, after which it will decide whether or not to put the rule into force ending the practice:
“The Federal Trade Commission proposed a new rule that would ban employers from imposing noncompetes on their workers, a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses. By stopping this practice, the agency estimates that the new proposed rule could increase wages by nearly $300 billion per year and expand career opportunities for about 30 million Americans.”
“The NPRM invites the public to submit comments on the proposed rule. The FTC will review the comments and may make changes, in a final rule, based on the comments and on the FTC’s further analysis of this issue. The comment period is open through March 20, 2023.”
The FTC will host a public forum on Thursday, February 16 examining the FTC’s proposed rule to prohibit employers from imposing non-competes on their workers, and providing an opportunity for people to directly share their experiences with non-competes.
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