SENATE BANKING SUBCOMMITTEE HEARING
OVERVIEW
For questions on the note below, please contact Scott Parsons, Kevin Batteh, or Edmund Perry.
On July 30, the Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Economic Policy held a hearing entitled “Banning Noncompete Agreements: Benefits for Workers, Businesses, and the Economy.” The witnesses in the hearing were:
- Heidi Shierholz, PhD, President, Economic Policy Institute
- R. James Toussaint, MD FAAOS, Orthopedic Surgeon
- Hayley Paige, Small Business Founder and Wedding Dress Designer
Below is a summary of the hearing prepared by Delta Strategy Group. It includes a summary, followed by several high-level takeaways from opening statements and discussion.
Summary
- The hearing focused on the impact of banning noncompete agreements on workers, businesses, and the economy. Discussions included the benefits of increased labor mobility, potential economic growth from enhanced competition, and the legal framework needed to enforce such a ban. Additionally, issues such as the protection of trade secrets, effects on innovation, and the varying impacts on different industries were addressed.
Below are some key takeaways from the hearing prepared by Delta Strategy Group.
KEY TAKEAWAYS
Opening Statements and Testimony
Chair Elizabeth Warren (D-MA)
- Noncompete agreements are a scourge on American workers. They suppress wages, limit job mobility, and hurt our economy.
- We need robust federal action to ban these harmful agreements and protect workers’ rights.
- We can balance the need to protect trade secrets with ensuring workers have the freedom to change jobs.
Ranking Member John Kennedy (R-LA)
- Noncompete agreements are a complex issue with varied impacts across industries.
- We need a nuanced approach that considers both worker protections and the legitimate needs of businesses.
- State laws already address many of these issues, and tailored solutions might be more effective than a one-size-fits-all federal mandate.
Dr. Heidi Shierholz, PhD, President, Economic Policy Institute
- Noncompete agreements have a profoundly negative impact on workers’ wages and job mobility.
- They suppress wages and limit opportunities for career advancement, especially for low- and middle-income workers. Research shows that banning noncompete agreements could lead to higher wages and increased innovation.
- We need federal legislation to ban noncompete agreements to create a more dynamic and equitable labor market.
Dr. R. James Toussaint, MD FAAOS, Orthopedic Surgeon
- As a medical professional, I see firsthand how noncompete agreements restrict doctors’ ability to move between practices, ultimately affecting patient care and access to medical services.
- These agreements limit our professional autonomy and make contract negotiations challenging.
Ms. Hayley Paige, Small Business Founder and Wedding Dress Designer
- Noncompete agreements have had a significant impact on my ability to pursue my passion and start new ventures.
- Eliminating noncompete agreements is essential to support small businesses and promote a competitive economy.