Demystifing Tech Careers: Industry-Driven Transparency for Expanding Access to the New Economy

Summary

The White House Office of Science and Technology Policy and/or the National Economic Council and Department of Labor should convene a Transparent Tech Training Alliance, a coalition of public and private sector leaders called to expand access to early tech careers by codifying and communicating industry hiring standards. To meet the economy’s urgent and growing demand for tech workers, innovative educators have developed tens of thousands of short courses and bootcamps to rapidly upskill workers. But this landscape is complicated to navigate, especially for low-wage workers and small- and medium-sized enterprises (SMEs) who are training and hiring in tech at increasing numbers. Without intervention, this nascent system will exacerbate the divide between the “haves and have nots” of our economy, further endangering the health of our workforce, communities, and businesses.

In response, the Alliance should: (1) make a highly publicized commitment to unprecedented transparency in hiring practices and the annual publication of hiring data; (2) generate a clear, industry-driven guide of certified credentials, career pathways, and funding sources; (3) utilize this guide and more for a prize competition that modernizes CareerOneStop; and (4) reconvene annually to publicize their progress and update resources.

Establishing the White House Council on Disabilities

Summary

Every American deserves to engage with the world on their own terms. But for the 61 million adults in the United States living with a disability, challenges—including social isolation, the need for advanced assistive technologies, access to care, and economic security—abound. These challenges require a coordinated National Strategy on Disabilities.

To empower people with disabilities to engage with the world on their own terms, President Biden should establish a White House Council on Disabilities tasked with the mission of providing a federally coordinated approach to aligning federal policy, medical reimbursement, and research funding to address issues critical to people those living with disabilities. The goal of this Council would be to provide much-needed leadership and coordination among federal agencies and with external stakeholders, that enable the development of (and access to) the new knowledge and technologies necessary to better support Americans with disabilities of all types and further enrich connections to one another and our economy.

Creating an Advanced Research Projects Agency (ARPA-L) for the Department of Labor

Summary

To create fresh and powerful new approaches to the complex challenges that America’s workers face, Congress and the Biden-Harris Administration should invest $100 million per year for 5 years to launch an Advanced Research Projects Agency for Labor (ARPA-L). ARPA-L’s mission will be to conduct high-impact R&D programs that create breakthroughs to meet America’s workforce challenges.

The COVID-19 pandemic has deeply exacerbated longstanding problems for America’s workers. Mismatches between workers’ skills and employers’ needs alongside persistent racial and gender inequities have long undercut opportunity. Moreover, work has continued to change due to technology and automation, globalization, and shifting relationships between workers and employers. Even before the COVID-19 crisis, many millions of Americans were not earning enough to support themselves and their families. These Americans are missing out on gainful work, while our economy and our society are missing out on their full contribution.

With current advances in information technology, data science, applied social sciences, and learning science, this moment calls for an ambitious initiative to tackle the longstanding challenges for America’s workers. The Federal Government should launch an ARPA-L to research, develop, and test breakthrough approaches that boost workers’ skills and harness data to open new opportunities. By drawing from the operating model of prior ARPA organizations and adapting it to these challenges, ARPA-L’s programs can make it possible to ameliorate underemployment and unemployment and transform the future of work.

To initiate ARPA-L, Congress should provide a budget of $100 million per year over a five-year period. The Biden-Harris Administration and the Secretary of Labor should appoint a highly qualified director and provide that individual with the support needed to succeed. By creating this independent agency at the Department of Labor (DOL), Congress, the White House, and DOL can create opportunity for the U.S. workforce for decades to come.

Expanding the NSF Graduate Research Fellowship Program to Preserve American Innovation

Summary

The U.S. government has identified artificial intelligence (AI), quantum information science (QIS), 5G networks, advanced manufacturing, and biotechnology as the five “Industries of the Future (ITF)”: key technological domains projected to have the greatest impact on advancing national competitiveness in the coming years. Sustained investment in the ITF is crucial to preserving national security, improving American healthcare, advancing towards a green economy, and achieving other societal priorities. Continued progress in the ITF is also necessary for the United States to stay ahead of global economic competitors such as China and the European Union.

However, the United States currently lacks the robust science, technology, engineering, and math (STEM) workforce needed for maintaining ITF leadership. Systemic inequities in the U.S. STEM talent pipeline hinder development of the deep scientific and technological expertise needed for U.S. workers to realize the full potential of the ITF. To address these inequities, the federal government must leverage and invest in its strongest vehicle of American scientific talent: the National Science Foundation (NSF).

By expanding its Graduate Research Fellowship Program (GRFP), the NSF can help build a scientific and technical workforce that fully reflects American diversity and captures the full value that such diversity offers. The result will be a nation in which more students—including the socioeconomically disadvantaged, minorities, women, and those far-removed from academia—have the skills and opportunities to contribute to the Industries of the Future.

Forging 1,000 Venture Scientists to Transform the Innovation Economy

Summary

The US innovation ecosystem is falling behind global players like China and India because our current Research and Development (R&D) landscape does not incentivize commercialization in university laboratories. The federal government should establish the Venture Science Doctorate (VSD) initiative to close this gap by training graduates to combine research and entrepreneurship in legacy sectors. The Biden-Harris Administration should support VSD to turn more metropolitan areas into innovation centers. Swifter shifts from theory to products are “crucial to our future prosperity” as a global leader and as the United States of America, creating opportunities to mitigate rising economic inequality. Executing the VSD will require multiple agencies. The Office of Science and Technology Policy (OSTP) will coordinate the creation of demand-side policies that remove barriers to innovation in legacy sectors. The National Science Foundation (NSF) will coordinate a strategy of regional development through VSD programs, tracking their impact with state-level economic indicators. A multinational collaboration will widen access to talent and distribute US lessons in innovation policy among international regulators in the pursuit of truly global public goods. A stronger science innovation system will recover ground the US has lost to competitors and create compelling partnership opportunities for allies.

This proposal describes a scalable PhD program that brings sector-shaping technologies to market. By bridging NSF programs for scientist training (e.g. I-Corps) and company funding (e.g. Small Business Innovation Research, Small Business Technology Transfer) VSD will support the entire innovation ecosystem. By producing scientists and influencing undergraduate degree choices, VSD will effect targeted and broad-based workforce expansion. By training graduates to create high-value manufacturing companies, job creation in this workforce and supporting sectors will soar. To do this, VSD will use mission-oriented research, complementing basic scientific research with DARPA-like, combinations of training, R&D and commerce. These are the economic experiments our innovation system needs for growth and sustainability in legacy sectors like clean energy. But to share this prosperity we need to start with the states “left behind.”

An Inclusion, Diversity & Equity in American Life (IDEAL) Commission

Summary

Collaboration among federal, state, local, and other stakeholders is essential if real progress is to be made in healing racial divisions in our country. The federal government invests billions in programs aimed at improving equality and diminishing substantial barriers to progress by racial and ethnic minorities. There is scant evidence, however, about which programs are most effective at achieving diversity, equity, and inclusion goals. Creating a temporary commission consisting of officials from relevant agencies can fill this gap. It can begin the process of building a body of evidence about what works and reinvesting in more effective practices. The commission would be responsible for inventorying programs designed to improve diversity, equity, or inclusion; assessing the body of evidence about them; and clarifying common goals. The Inclusion, Diversity & Equity in American Life (IDEAL) Commission would make an important contribution to finding more effective remedies to some of our country’s most lasting, difficult wounds. In fact, it would reinforce the Biden-Harris Administration’s recent executive order, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government,” which stated unequivocally that “[a]ffirmatively advancing equity, civil rights, racial justice, and equal opportunity is the responsibility of the whole of our Government.” A close working relationship between the commission proposed here and the Equitable Data Working Group established by the executive order would be essential.

The Energy Transition Workforce Initiative

Summary

The energy transition underway in the United States presents a unique set of opportunities to put Americans back to work through the deployment of new technologies, infrastructure, energy efficiency, and expansion of the electricity system to meet our carbon goals. Unlike many previous industrial transitions, the U.S. can directly influence the pace of change and create new jobs while old ones are phasing out. The next administration should launch the Energy Transition Workforce Initiative to put Americans back to work with well-paying, union jobs building a stronger, more climate-resilient nation.

The Energy Transition Workforce Initiative proposes a collection of actions that the incoming administration could enact on Day One and through the Administration’s first year. This set of actions largely tracks the following three principles:

  1. Utilize carbon-reduction investments – such as energy efficiency upgrades, infrastructure investments and electrification technologies – as economic development tools in under-served communities and those impacted by the loss of fossil-fuel jobs.
  2. Expand our existing energy workforce training system to respond to all communities experiencing dislocations and high levels of unemployment, while also providing opportunity and training for the additional employees necessary to complete the energy transition.
  3. Allocate $20 billion over the next decade specifically to retrain the existing energy workforce with a focus on their impacted communities.

With success, the Energy Transition Workforce Initiative will ensure that the U.S. captures all the opportunities presented by the energy transition for the middle and working class.

Banning Noncompete Agreements to Create Competitive Job Markets

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Competitive job markets are critical to the success of the national economy, spurring innovation while boosting wages and labor equality. The moment is ripe for the new administration to foster competitive job markets by banning noncompete agreements (noncompetes). New empirical evidence shows that noncompetes have harmful effects on job mobility, wages, competition, entrepreneurship, and equality. Yet noncompetes are widely included in employment contracts. And inconsistent state rules on noncompetes (and their enforcement) have led to employee confusion and disputes among state courts.

A tough, consistent federal strategy to eliminate noncompetes is needed. Several recent federal and state initiatives addressing noncompetes have created momentum that the new administration can build on to rapidly address this issue. The Biden-Harris administration should (1) adopt a federal ban on noncompetes, (2) actively educate the public about their labor-mobility rights (and actively support those rights), and (3) take proactive steps to ensure compliance with labor-mobility policy. Specific steps the new administration could consider include:

Challenge and Opportunity

Noncompetes Hurt Workers and the Economy

Noncompete agreements are contracts that prohibit employees from working for or becoming a competitor for a certain period of time. By restricting employees from switching employers or starting their own competing businesses, noncompetes have harmful economic effects. They depress wages, reduce entrepreneurship, and impede efforts to correct inequities in labor markets. In the past decade, a wealth of research—including diverse empirical, experimental, and theoretical studies—have revealed the adverse effects of noncompete contracts and similar restrictions on the free movement of human capital. As a 2018 article states, “policymakers, economists, and legal scholars…overwhelmingly conclude that the harms of noncompetes far outweigh their potential benefits.” The research shows that lifting noncompete restrictions—thereby increasing job mobility—is good for entrepreneurship, wages, industry and regional economic growth, and equality.

Entrepreneurship

Increased enforcement of noncompetes favors large, incumbent firms. Studies find that markets become more concentrated when noncompetes are adopted and enforced. When employees sign noncompetes with established firms, start-up companies have difficulty recruiting talent. Indeed, a ban on noncompetes in California generated greater and faster innovation because employees with good ideas that their employer did not want to use were able to take those ideas elsewhere.

Wages

Noncompetes decrease wages. Employers calibrate compensation largely based on competing external offers. When external offers are reduced, employers face less pressure to increase wages. In 2015, Hawaii passed a law banning noncompete and non-solicitation clauses from employment contracts in the high-tech industry. A recent study found that Hawaii ban increased employee mobility in the high-tech sector by 11% and increased new-hire salaries by 4%. Noncompetes even decrease wages for employees who have not signed them. In a market that enforces noncompetes, wages and mobility are lower for everyone, including those not directly bound by noncompetes. These impacts can last a long time. A 2017 study found that post-employment restrictions have persistent wage-suppressing effects that last throughout a worker’s job and employment history. 

Equality

Restrictions on job mobility have a disproportionate negative effect on certain demographics. In job markets, discovering one is competitive depends on the frequency with which one is exposed to information about one’s comparative options in the market. In job markets where workers don’t often move from job to job, the “price” of labor (i.e., the terms and conditions of an employee’s contract) will lag behind an employee’s true market value. If an employee discovers their undervalued labor compensation by receiving an external (better) offer from a competitor employer, the employee can use that information to negotiate a higher salary with their current employer. If the current employer offers to match the higher salary, the competitor employer can come back with an even higher offer. This process continues until one employer backs down, leaving the employee better and more fairly compensated as a result.

The existence of noncompetes cause this process to break down by taking away employee bargaining power. Noncompetes harm equality in several ways as a result. First, noncompetes exacerbate the gender pay gap. Women are more likely to have geographic constraints based on family and spousal obligations. Noncompetes that restricts employee capacity to compete within a region therefore disproportionately hurt woman. Second, taking away employee capacity to entertain outside offers can cause historical pay gaps to persist or widen. Employees cannot discover their true value without external offers. The more external offers are available, the more equity norms and competitive pressures from mobility drive employers to raise wages as retention efforts. Third, white women and people of color are more likely to have non-monetary preferences for a workplace that is free of discrimination and hostility and that values diversity. For example, if a woman discovers that her employer systematically allows harassment of its female employees, she will have a strong interest in examining other opportunities in the market. A noncompete restricting her mobility will prevent her from escaping the discriminatory workplace.

Noncompetes are on the Rise

The use of noncompetes is on the rise in the United States. Employment agreements routinely prohibit workers from accepting a competitor’s job offer, and/or from working in a competing business for a specified period in a certain geographic area. The Treasury Department recently estimated that nearly 30 million workers are bound by noncompete provisions. A study of executive employment contracts found that 70% of the firms investigated imposed noncompetes on their top employees. A forthcoming 2021 study found that noncompetes are also common for non-executive employees with base salaries below $100,000 per year. A 2019 report noted that “the use of noncompetes is so pervasive that even volunteers in non-profit organizations, in states that do not even enforce them, are asked to sign away their post-employment freedom.”

Workers currently have limited recourse when it comes to contesting noncompetes. Court decisions in cases involving noncompetes are highly unpredictable, and litigation can be prohibitively expensive and burdensome for individual employees. Some states—recently including Massachusetts, Washington, Maryland, and New Hampshire—have passed laws voiding most noncompetes, but this state-specific legislative patchwork can be difficult for workers to understand. Many employees, especially those outside the professional class, end up complying with noncompetes even if they aren’t enforceable in the state in which they work (or are planning to move for a new job). Moreover, more and more people are employed at companies with a national presence. Such companies often demand adherence to a noncompete nationwide, even for employees in a state that won’t enforce noncompetes. Inconsistent state rules have also led to conflicts across state lines when an employee bound by a noncompete moves to a state that doesn’t enforce them. This has resulted in a “race to the courthouse” when employees change jobs, as each side tries to get its own state law to apply. It has even led to the unseemly spectacle of courts in different states attempting to prohibit each other from enforcing their respective state policies. Finally, the complex legal landscape surrounding noncompetes further entrenches established companies. Companies with substantial legal and financial resources can be more aggressive in using noncompetes to drive out competition even when their legal claims are on weak grounds. Incumbents may even use a reputation for suing employees who leave as a strategy to deter other employees from leaving.

National Leadership is Needed

Noncompetes aren’t just bad for workers, but for our economy and society as a whole. We do better when workers can easily move between jobs. Increased mobility makes it easier for employees to find employers that most value their skills, and for employers to find employees who are good fits. But without guaranteed labor mobility, the anti-competitive impulses of individual firms create a collective-action problem. Smart policy is needed to ensure everyone benefits from a continuous, high-quality, and flexible labor pool over time. The problem of noncompetes is not a problem that can be solved by states on their own. National leadership is needed. Several federal bills limiting the use of noncompetes (either entirely or just for low-wage workers) have already been drafted. The White House issued a Call for Action in 2016 urging states to limit the use of post-employment restrictions. Also in 2016, the U.S. Treasury Department issued a report on noncompetes warning that when noncompetes are enforced, “innovations spread more slowly, possibly inhibiting the development of industrial clusters like Silicon Valley.” In 2020, the Federal Trade Commission convened a meeting to consider a rule prohibiting noncompete clauses. But so far the FTC has taken no action.

The Biden-Harris Administration can build on this momentum to eliminate noncompetes in the United States once and for all.

Plan of Action

To support talent mobility and enhance human capital, the Biden-Harris Administration should (1) adopt a federal ban on noncompetes, (2) actively educate the public about their labormobility rights (and actively support those rights), and (3) take proactive steps to ensure compliance with labor-mobility policy. Below, we recommend specific steps that the new administration could take towards these goals.

Adopt a Federal Ban on Noncompetes

A federal ban on noncompetes could potentially be achieved by a Federal Trade Commission (FTC) rule barring noncompetes, action through the Department of Justice (DOJ), an executive order, and/or legislation. If barring all noncompetes is not yet politically feasible, targeting noncompetes imposed on low-wage and unskilled workers would be a good first step. 

FTC rule/DOJ action

The FTC and the DOJ’s Antitrust Division have only recently started to consider anti-competitive practices in the labor market to be within their scope of regulating competition and unfair trade practices. The FTC could use its regulatory power under Section 5 of the FTC Act’s prohibition on “unfair methods of competition” to issue a federal rule to ban noncompetes nationwide in appropriate circumstances, such as concentrated markets. The FTC could enforce this rule by bringing action against employers who use, or seek to use, noncompetes to restrict employee mobility in ways that interferes with competition. 

Moreover, California’s Section 16600 and Section 1 of the federal Sherman Act share the language of prohibiting contracts “in restraint of trade.” The California law has been consistently interpreted to ban employment noncompetes. Using this interpretation as precedent, the DOJ could leverage the language in Section 1 of the Sherman Act to ban employment noncompetes nationwide in appropriate circumstances, such as in concentrated markets.

Executive Order

The Biden-Harris administration can also issue executive orders that (1) restrict or eliminate government contracting with companies that employ noncompetes; (2) require employers in states that restrict noncompetes not to sign them with employees in those states, and/or to give prominent notice of the unenforceability of noncompetes in those states.

Legislation

Two recently proposed federal bills propose legislative solutions to the problem of noncompetes. The Workforce Mobility Act proposed in 2018 would prohibit and prevent enforcement of noncompetes for employees who “engage in commerce or in the production of goods for commerce.” Under the proposed bill, employers would be fined for each employee subject to a violation of this law, or for each week the employer was in violation. The House version of the bill goes further, specifically stating that noncompetes may violate antitrust laws.

The Mobility and Opportunity for Vulnerable Employees (MOVE) Act of 2015—proposes a full or partial ban on noncompetes, in addition to barring noncompete agreements entirely for low-wage workers. The bill would also require companies to notify job applicants ahead of time if they would be asked to sign a noncompete if hired.

The new administration could work with Congress to revive and pass one or both of these bills. Any federal bill governing noncompetes should also grant employees a private right of action for damages if they are asked to sign an overly broad noncompete agreement.

Actively Support and Publicize Labor-Mobility Rights

Even in states that ban noncompetes, a significant number of employers still require employees to sign them. For example, employers in California—a state that bans noncompetes—insert noncompetes into their employment contracts at rates similar to non-California employers. Because employees in these states may not be aware that noncompetes are illegal, unlawful noncompetes can have a significant deterrent effect on employee mobility. The administration should act to educate the public about their labor-mobility rights, and to crack down on employers unlawfully promulgating noncompetes. The Biden-Harris administration should issue an executive order directing the Department of Labor, FTC, and the DOJ Antitrust Division to collaborate to actively enforce existing labor-mobility laws, and to pursue some or all of the actions below.

Require “right-to-leave” notice in employment contracts

The Biden-Harris Administration should require employment contracts to include a notice about employees’ right to leave their employer. The Defend Trade Secrets Act (DTSA), enacted by Congress in 2016, provides a model for this type of mandatory notice. The DTSA gives employees immunity from criminal or civil liability for reporting illegalities at a company even if reporting reveals trade secrets. The DTSA requires employers to include notice of this immunity in “in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.” Similarly, the Federal Government should require employment contracts to include a clause about the rights of an employee to compete with their previous employer after leaving a job. This clause should be required for all contracts in states that ban noncompetes post-employment. If a federal noncompete ban is enacted, it should apply nationwide. The Federal Government could further promote market competition by amending the DTSA to include a notice on the limits of trade secrets explaining that general know-how and information that is readily ascertainable from public searches cannot be deemed secret and proprietary.

Enforce mobility rights beyond formal noncompetes

In employment contracts, restrictive covenants do not simply appear as a formally labeled “noncompete clause”. Employment contracts regularly include other restrictive provisions such as requirements for non-solicitation of customers and coworkers, pre-innovation assignment agreements, nondisclosure agreements, and non-disparagement clauses. Restrictions like these impose harms similar to noncompete clauses: preventing employee mobility, slowing innovation, stifling start-ups, and concentrating industries. Customer non-solicitation requirements in particular effectively function as noncompetes “because a business without clients is like a pool without water.” Coworker non-solicitation clauses essentially reduce the job opportunities of every former co-worker that the employee in question knows, regardless of whether those coworkers agreed to be part of a restrictive regime. Nondisclosure agreements, theoretically designed to protect trade secrets, are often structured to include not just proprietary knowledge, but also readily ascertainable knowledge about customers and coworkers. The knowledge that a departed employee would use to solicit a former coworker—knowledge pertaining to a person’s skills, talent, personality, experience, and salary—is not an employer’s trade secret and should not be restricted by contract. California courts have recently recognized that employee non-solicitation clauses comprise unlawful restraints on trade under Section 16600. The new administration can build on precedent set in California to control proliferation of overly restrictive provisions in employment contracts nationwide.

Ban salary secrecy

The ability to reveal one’s salary to co-workers and others in the industry is protected by both federal and state law. The National Labor Relations Board (NLRB) holds that prohibiting any employee—unionized or not—from discussing salaries violates their rights under the National Labor Relations Act to engage in concerted activity for mutual aid. The NLRB has specifically ruled that confidentiality agreements are invalid when they contain provisions that “prohibit employees from disclosing certain personnel information unless authorized by the Company.” Many state laws also make it illegal for any employer to prohibit pay discussions among employees. Digital platforms such as LinkedIn, Glassdoor, Salary.com, and SalaryExpert make compensation information easily searchable. Yet employers have attempted to claim that use of salary knowledge in recruitment efforts by a former employee of a co-worker can amount to a breach of a nondisclosure agreement. The administration should extend the NLRB rule beyond the context of labor unions, banning salary secrecy.

Ensure Compliance with Labor-Mobility Policy

As discussed above, litigation alone cannot address the widespread use of noncompete clauses. Employees often lack the money, time, expertise, or will needed to challenge a noncompete in court. The Federal Government must instead be proactive in understanding the effects that common employer practices and provisions have on labor mobility. Several state attorneys general have taken such a proactive stance. Illinois and New York in particular have recently investigated employers who required their employees to sign unenforceable contracts. These states used consumer laws worded similarly to the federal FTC Act as bases for prosecution. For example, Illinois’s Consumer Fraud and Deceptive Business Practices Act prohibits “unfair methods of competition and unfair or deceptive acts or practices.” The state attorney general’s office explains that: “An ‘unfair practice’ is one that (1) offends public policy as established by statute, common law or otherwise, (2) is immoral, unethical, oppressive, or unscrupulous, or (3) causes substantial injury to consumers. A non-compete that violates existing common law or statutory restrictions could satisfy each prong of this test, creating a cause of action in states with similar consumer protection statutes or strong unfair competition laws.”80 The Department of Labor and the FTC should collaborate on investigating employers who require their employees to sign unjustifiable noncompetes, using the FTC Act as grounds for investigation.

Conclusion 

The modern economy depends on employee mobility. Our workforce needs to be able to respond to sudden disruptions like COVID-19, which radically shifted demand for workers, and to longer-term geographic and economic trends. Employees should have the freedom to take the jobs that are best for them, or to start new companies if they have innovative ideas that otherwise will never see the light of day. 

Unfortunately, companies are too often able to prevent employees from leaving, either because the law permits it in many states or because employees don’t know their rights. This control depresses wages and employee initiative. It reduces innovation and the adoption of new technologies. And it keeps people stuck in dead-end jobs when they have better alternatives available to them. The current hodgepodge of state laws and the threat of enforcement of a noncompete means that even states that ban noncompetes can’t get the full benefit of the protections they provide to their workers and innovators. It is time for the Federal Government to step in.

Frequently Asked Questions
What agencies would be involved in a federal crackdown on noncompetes?
The approach described herein would be a White House-led, multi-agency effort. Supporting a competitive job market is a goal shared by several government agencies. The Department of Labor oversees employee rights and the Equal Employment Opportunity Commission (EEOC) collects data and enforces federal anti-discrimination laws. The Federal Trade Commission and the Department of Justice Antitrust Division regulate competition policy. The General Services Administration and individual departments have their own contracts with private suppliers. Because no one agency has clear authority over all the effects of non-competes, the White House should take the lead in developing and implementing a multi-agency approach to eliminating or minimizing noncompetes nationwide. Harnessing the regulatory and enforcement powers of multiple agencies under White House leadership will have significant national impact on wages, innovation, and economic growth.
Didn’t President Obama already take action on noncompetes in 2016?
In 2016, President Obama convened a White House working group that resulted in a Presidential Call for Action to curtail the expansion of noncompetes. The Call for Action asked states that do enforce noncompetes to reject reformation and blue penciling and to take strong action against misleading contracts. That Call for Action was an important step. But it has not resulted in uniform state action to restrict noncompetes. Noncompetes remain pervasive, even in states that do not enforce them. Additional federal leadership is needed.
Is legislation required to curb noncompetes?
Legislation is not required to implement most of the proposals described herein. Executive orders can accomplish things like making notice of labor-mobility rights a mandatory component of employment contracts and giving preference for government contracts to companies that do not use noncompetes. Even a federal ban on noncompetes may not require legislation. Such a ban could be achieved by an FTC rule barring noncompetes under Section 5 of the FTC Act’s prohibition on “unfair methods of competition”. The FTC could enforce this rule by bringing action against employers who use, or seek to use, noncompetes with their employees. Section 1 of the federal Sherman Act prohibiting contracts “in restraint of trade” could similarly be used to prohibit noncompetes that restrain competition in the talent market, particularly in concentrated industries.
Won’t eliminating noncompetes interfere with trade secrets?
In 2016, the Defend Trade Secrets Act (DTSA) created a federal civil cause of action for tradesecret misappropriation. The DTSA complements state trade-secrecy laws, which follow the Uniform Trade Secrecy Act. In states like California that ban noncompetes, trade-secrecy laws continue to project employers against the misappropriation of proprietary information. Trade secrecy laws give employers potent protections. Even without noncompetes, employers can continue to protect their confidential information through trade-secrecy law and (reasonable) non-disclosure agreements. Indeed, the effectiveness of trade-secrecy laws highlights the problematic nature of noncompetes. Companies already have strong tools to prevent departing employees from taking their trade secrets. If there’s little risk of a departing employee taking their former employer’s trade secrets with them, the employer’s justification for banning them from taking a new job is much weaker.
Isn’t banning noncompetes at odds with antitrust law’s distinction between horizontal and vertical agreements?
Horizontal collusions among companies agreeing not to hire each other’s employees have only recently drawn the attention of the Department of Justice, which now concludes that these practices are violations of American antitrust law. Similar vertical agreements—i.e., between an employer and their employees—are not normally treated as illegal. But they are still subject to antitrust scrutiny under the rule of reason, and certain categories of vertical restriction are illegal per se. Noncompetes seek to accomplish the same goal that no-poach agreements do: preventing an employee from moving from one competitor to another. In fact, noncompetes are often broader than do-not-hire agreements as they seek to prevent competition within an entire industry, not merely among several firms. Noncompete clauses can hence be interpreted under the Sherman Act as unreasonable non-price vertical restraints.
Wouldn’t federal action on noncompetes interfere with states’ rights?
Competitive labor markets, like competitive consumer markets, are a national issue. Federal law regulates numerous aspects of the labor market, including wage and hour laws, health and safety, discrimination, and family and medical leave. Federal law supplements state law in protecting trade secrets in a global market as well. It makes sense for the Federal Government to also support workers’ ability to leave their employers and to remain active in the national talent pool. Noncompetes contribute to national wage stagnation, continuous racial and gender pay gaps, and market concentration. When they are enforced, employees are either forced to stay with the same company or take an unpaid leave from their industry, risking unemployment and overall reduction in innovation and economic growth. These are issues of key national importance. Moreover, misinformation about noncompete laws is rampant in part because of the great uncertainty created by interstate differences in these laws. Federal leadership will help replace this patchwork with consistency. Finally, employers regularly attempt to include a “choice of law” clause in employment contracts. These contracts allow the employers to adopt the law of the jurisdiction most likely to enforce noncompete clauses. As a result, employees regularly sign noncompetes even in states where they are unenforceable. A national policy is needed to address these linked issues of widespread misinformation and “forum shopping”.

Recruiting and Retaining Highly Effective Teachers of Color

Summary

The Biden-Harris Administration is committed to providing the best possible education to all students. Research has established that students of color experience benefits to social and emotional development and learning outcomes when taught by educators of color. Diverse educators and administrators are particularly important for schools with many students of color. Accordingly, schools across the country should prioritize hiring highly-effective teachers of color. This policy proposal identifies opportunities to recruit—and retain—highly effective K-12 educators of color.

As a first step, the Biden-Harris Administration should create an Under Secretary of Diversity at the Department of Education (ED), charged with organizing a White House Summit to establish the value of a diverse teacher workforce and convene leaders to identify best practices and a strategy for Federal Government support of state, local, and private programs. Following the summit, ED, led by the Under Secretary of Diversity, should revisit current programs that identify high need areas, such as math, science and special education to include the pressing need for diverse educators. Simultaneously, the administration must work with Congress to reauthorize the Higher Education Act, incorporating the previously introduced College Transparency Act to ensure robust data reporting and evaluate the effectiveness of financial incentives.

Building Thriving Local Economies by Leveraging the Maker Movement to Close the Skills Gap

Summary

The Federal Government should further invest in, support and scale four existing approaches to building local skills and vibrant, self-sufficient local economies by coupling localities’ needs with workforce development and small-scale manufacturing. This is achieved by scaling local programs and initiatives which harness the Maker Movement, a community-driven, grassroots effort to enable people to design, prototype and manufacture projects, solutions and products.

Specifically, the Federal Government should:

By harnessing early successes from across the country, these policy solutions can rapidly stand up localized programs to immediately support more American communities grappling with skills shortages. This need is exponentially more critical in the face of COVID-19, as 80% of U.S. manufacturers have articulated that their business will be financially affected by the pandemic and 53% require a change of operations, including the increased use of automation technologies.

Creating a Digital Work Projects Administration

Summary

To address the massive unemployment caused by the COVID-19 pandemic, the Biden-Harris administration should establish a Digital Work Projects Administration (D-WPA), creating government-funded jobs that people can perform from their own homes or other safe locations. Inspired by the Depression-era Work Projects Administration, or WPA, the modern D-WPA would put millions of unemployed Americans to work serving the public good and speeding the country’s economic recovery.

In the D-WPA, work will be digital instead of physical. Digital tools allow many jobs to be done from anywhere good internet access is available. D-WPA participants could work safely and effectively no matter how long the pandemic limits in-person employment. Working remotely, D-WPA participants could help combat the COVID-19 pandemic and mitigate its economic and societal impacts. At the same time, participants would learn, practice, and improve digital skills of increasing value in the modern workforce.

The D-WPA should be established within the Department of Labor, with sufficient funding to put up to 4 million Americans back to work quickly and safely. Funds for this program should be requested in the next COVID-19 recovery package. In the meantime, existing DOL employment and training programs could be used to support an initial cohort of workers for the D-WPA, demonstrating proof of concept while efforts are underway to secure full funding. The D-WPA should create both public- and private-sector positions supporting the national response to the pandemic’s health and economic impacts.

Embedding Evidence and Evaluation in Economic Recovery Legislation

Summary

The COVID-19 pandemic has had devastating impacts on communities across the country. Tens of millions of people lost jobs and millions of school children have fallen behind. To help people recover from the effects of the pandemic, the next administration should invest in proven solutions by working with Congress to embed evaluation and evidence-building into economic stimulus legislation, strengthening the foundation for an equitable and efficient recovery.

The new administration and Congress should ensure that any forthcoming economic stimulus legislation include provisions requiring commitments to build new evidence and utilize existing evidence. Specifically, the administration should establish a task force coordinated by the National Economic Council to:

  1. Work with agencies and Congress to set aside a portion of recovery resources (up to 1%) for evaluation and evidence-building, based in part on agency learning agendas created in response to the Evidence Act.
  2. Create a National Economic Mobility Innovation Fund at the U.S. Department of the Treasury.
  3. Empower the Office of Evaluation Services (OES) within the General Services Administration (GSA) to help agencies develop evaluation and evidence-building capacity.
  4. Create Excellence in What Works in Economic Mobility Awards.

These strategies, which we are collectively calling a “Stimulus Evaluation Act,” should be integrated into current and future economic recovery efforts.