How Businesses Use Noncompetes

ECONOMIC VIEWPOINT: The Manufacturing and Service Sectors are Diverging In February, the manufacturing sector was in contractionary territory for the 4th straight month (a reading below 50) according to the ISM survey on manufacturers.  Why it matters: Manufacturing has been on a steady decline since it hit an all-time high in March 2021. Fill me in: The service sector remains strong. It was at roughly the same level in February as in January. Be smart: The split between the sectors is explained by the recovery from the COVID-19 pandemic. Services were depressed during the pandemic and are still recovering. Looking ahead: Expect this situation to remain for some time as the economy continues adjusting to the post-COVID-19 normal. Click Here to Learn More

Small Biz Forecast  Every week, the U.S. Chamber’s Vice President of Small Business Policy Tom Sullivan summarizes the latest data and what it means for the health of America’s small businesses. The Latest Forecast: Sunny and cold. Storm clouds in the far distance. Fill me in: The latest data show positive growth in emergency savings and small business owners’ confidence in their own firms. Difficulty in finding qualified and willing employees is making the temperature cold and is dampening growth expectations. The storm clouds in the distance are formed by federal regulatory overreach, which is a longer-term concern. Listen now: Tom Sullivan and National Federation of Independent Business (NFIB)’s Holly Wade talk about their small business forecasts on a weekly podcast. Click here to listen now.  Click Here to Learn More

EXPLAINER: How Businesses Use Noncompetes The Federal Trade Commission’s proposed rule to ban noncompete clauses in employment contracts has raised concerns from across the business community. Therefore, the U.S. Chamber of Commerce asked businesses how they use noncompetes and how this rule might affect their operations. Why it matters: The FTC’s sweeping rule would drastically impact how businesses hire, invest in employees, and protect sensitive information. By the numbers: •    67% agreed that a near-total ban on noncompete agreements would hurt their business’s talent strategy and/or compensation strategy. •    80% stated they use some form of restrictive covenants including noncompete agreements. •    62% stated that less than 10% of their workforce is covered by noncompete restrictions. Our take: For the FTC to promulgate a rule of this nature—it needs statutory authority to do so, but also has to make a compelling case that such a federal rule is necessary. The FTC’s proposed rule has failed on both accounts.   Click Here to Learn More