U.S. forces glass, security companies to drop noncompete clauses for workers

Reuters
Updated ·2 min read
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FILE PHOTO: Signage is seen at the Federal Trade Commission headquarters in Washington, D.C.

WASHINGTON (Reuters) -Under pressure from the Biden administration, two glass container makers and a security company have agreed to drop noncompete requirements which limited where employees could work if they left their jobs.

The Biden administration also disclosed on Wednesday that the Federal Trade Commission (FTC), which enforces antitrust law, plans to propose a rule barring companies from imposing the provisions on workers, according to a public notice that offered few details.

The FTC said on Wednesday that Ardagh Glass S.A. and O-I Glass Inc, the two largest U.S. glass container makers, had agreed to scrap their noncompete agreements, which affected more than 1,700 workers. Ardagh typically barred former workers from being employed by another similar company for two years while O-I Glass said the company had to give written consent for former workers to take new jobs in the industry, the FTC said.

The agency said the complaints in the case were the first that it had filed to stop what it described as "unlawful noncompete restrictions."

Prudential Security, Inc and Prudential Command, two affiliated companies which have sold much of their business, also agreed to end enforcement of noncompete provisions in employment contracts.

Ardagh and O-I Glass did not immediately respond to requests for comment. Titan Security, which acquired Prudential Security, said it does not use noncompete agreements and supported dropping them.

The actions against the companies coupled with the rule announcement show the Biden administration is stepping up efforts to boost worker protections.

U.S. antitrust agencies, including the FTC, have pursued companies that limited workers' opportunities but the Biden administration has put more emphasis on the issue.

FTC Commissioner Rebecca Slaughter said in 2020 that surveys have estimated that noncompete provisions covered 16% to 18% of all U.S. workers. She said that 12% of workers earning less than $20,000 per year are subject to the provisions.

(Reporting by Diane Bartz and David Shepardson; Editing by Josie Kao)