While still apparently fully on-board with ramping-up US trade secrecy law through the Defend Trade Secrets Act (DTSA), the White House has also released a new report that criticizes non-compete agreements and state laws that over-zealously enforce those agreements. Although the report recognizes that non-compete agreements are wrapped-up with trade secrecy enforcement, but suggests that a large number of non-competes are not used for that purpose. The U.S. Treasury Department released a parallel report in March 2016
The White House report explains:
[T]he U.S. economy faces a number of longer-run challenges, some of which go back several decades. In at least part of the economy, evidence suggests that competition for consumers and workers is declining, and the number of new firms each year is experiencing a downward trend. In addition to this trend, there has been a decrease in ‘business dynamism’—the so-called churn of firms and who is working for whom in the labor market— since the 1970s. One factor driving these issues may be institutional changes in labor markets, such as greater restrictions on a worker’s ability to move between jobs. To address these and other issues that limit competition in the marketplace, the President has directed executive departments and agencies to propose new ways of promoting competition and providing consumers and workers with information they need to make informed choices, in an effort to improve competitive markets and empower consumers’ and workers’ voices across the country. Building on these efforts, this document provides a starting place for further investigation of the problematic usage of one institutional factor that has the potential to hold back wages—noncompete agreements. These agreements currently impact nearly a fifth of U.S. workers, including a large number of low-wage workers. . . .
The main economically and societally beneficial uses of non-competes are to protect trade secrets, which can promote innovation, and to incentivize employers to invest in worker training because of reduced probability of exit from the firm. However, evidence indicates that non-competes are also being used in instances where the benefit is likely to be low (e.g., where workers report they do not have trade secrets), but the cost is still high to the worker.
The White House is not expected to take any immediate action but rather is offering discussion points and will likely have further comments at the signing of the Defend Trade Secrets Act later this week.