U.S. Forces Glass and Security Firms to Eliminate Noncompete Clauses for Employees, Reports Reuters

Title: Glass Container Manufacturers and Security Firm Drop Noncompete Agreements Amid Biden Administration Pressure

Under pressure from the Biden administration, two prominent glass container manufacturers along with a security company have decided to eliminate noncompete clauses that restricted employee mobility after leaving their positions.

On Wednesday, the Biden administration announced that the Federal Trade Commission (FTC), which oversees antitrust regulations, intends to propose a new rule that would prevent companies from enforcing such clauses against workers. Although the announcement provided limited details, it underscores a significant shift towards enhancing worker protections.

The FTC revealed that Ardagh Glass S.A. and O-I Glass Inc., the leading glass container makers in the U.S., have agreed to terminate their noncompete contracts, impacting more than 1,700 employees. Ardagh previously prohibited former employees from working for competing firms for a period of two years, while O-I Glass required written approval for former workers to pursue jobs in the same industry.

This case marked the FTC’s initial effort to halt what it termed "unlawful noncompete restrictions." Additionally, Prudential Security, Inc. and its affiliate, Prudential Command, which have significantly reduced their business operations, also committed to ending the enforcement of noncompete clauses in their employee contracts.

While Ardagh and O-I Glass did not provide immediate comments following the announcement, Titan Security, which acquired Prudential Security, stated that it does not utilize noncompete agreements and supports their elimination.

These actions, alongside the forthcoming rule proposal, indicate the Biden administration’s intensified focus on enhancing protections for workers. U.S. antitrust agencies, including the FTC, have historically addressed issues surrounding companies that limit employee opportunities, but the current administration is placing greater emphasis on this matter.

FTC Commissioner Rebecca Slaughter previously noted that surveys indicate noncompete clauses affect approximately 16% to 18% of U.S. employees, with around 12% of workers earning less than $20,000 annually being subject to these restrictions.