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Takeaways from the State of the Union Address

During the State of the Union address, President Biden mentioned a number of workplace policy agenda items of interest to member companies: 

  • Ban on non-compete agreements: The President referenced his executive order calling on relevant agencies to ban the use of non-compete clauses in employment agreements. The Federal Trade Commission has proposed a rule to outright ban such agreements. There is a strong chance that the FTC’s proposal will be challenged and defeated in the courts. However, a similar legislative proposal, the Workplace Mobility Act, has been reintroduced. The proposal has bipartisan, bicameral support, which makes it more than likely that a non-compete bill will make significant progress in this Congress. HR Policy Association has long advocated against a total ban on the use of non-compete agreements, especially at the executive level. We will submit formal comments to the FTC, continue to advocate against legislative proposals to apply a blanket ban, and educate lawmakers on the business case for certain non-compete agreements.

  • Labor relations and the PRO Act: The President called on Congress to pass the Protecting the Right to Organize (PRO) Act. Introduced in previous congresses and certain to be reintroduced this year, the PRO Act would radically rewrite federal labor law in favor of organized labor. Among its many components are provisions that would institute costly financial (and even criminal) penalties for labor law violations, replace secret ballot representation elections with the concept of “card check” union recognition, and impose collective bargaining agreements on employers in the absence of mutual agreement. With Republicans in the majority in the House of Representatives, it’s not likely this bill will garner sufficient support for passage. Instead, the White House will likely lean on the the NLRB to continue its high pace of precedent-erasing activity and intensified scrutiny of employers from the Board.

  • Federal paid family and medical leave: President Biden briefly urged Congress to pass paid leave. He has previously called on Congress to pass comprehensive paid family and medical leave legislation. A bipartisan congressional paid family leave effort is underway in the House of Representatives. While some Republican lawmakers are expressing support for paid leave, any proposals will have to be limited in scope, and members will have to reach agreement over how such a plan would be funded and delivered, which will be a herculean task for a divided Congress. In the meantime, President Biden signed a memorandum to broaden access to family and medical leave for federal employees and convened a meeting with state legislators who are working to advance bills this session that would create statewide paid family and medical leave programs.

  • Mental health: In a separate Fact Sheet, the President said his administration will propose new rules to ensure that employer health plans are not imposing inequitable barriers to care and that mental health providers are paid on par with other health care professionals. Although HR Policy members are strongly supportive of employee well-being, these new rules could create substantial plan design obligations and increased costs for employer plans. The Association will continue to advocate against any action that will negatively impact employer health plans.

  • Immigration: Acknowledging that passing comprehensive immigration reform may not be achievable, the President called upon Congress to seek immigration reform in a bipartisan manner this congress. Biden urged lawmakers to secure the border and a pathway to citizenship for Dreamers, those on temporary status, farm workers, and essential workers. The Association will continue to advocate for employment-based immigration reforms, including increasing the number of work-based visas available. 

Outlook: Given both the Republicans’ and Democrats’ thin majorities, most of the President’s priorities will be impeded in Congress. As a result, member companies should anticipate even more increased regulatory activity by agencies for the next two years heading into the 2024 presidential elections. 

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Authors: Chatrane Birbal

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