The End of Non-Compete Agreements?
Happy Friday! The downside of selling the naming rights of your basketball arena to a shady crypto exchange is that, when that shady crypto exchange is exposed as a huge fraud, you have to strip the name off the building.
Until further notice, the Miami Heat play their home games at “The Arena.”
Quick Hits: Today’s Top Stories
- Attorney General Merrick Garland announced Thursday he was appointing a special counsel—former federal prosecutor Robert Hur—to oversee the criminal investigation into President Joe Biden’s possible mishandling of classified material. According to Garland, his decision to name a special counsel was made in consultation with U.S. Attorney John Lausch on January 5, after Biden’s attorney informed Lausch on December 20 that a second batch of classified documents from the Obama administration was found in the garage of Biden’s home in Wilmington, Delaware. The Biden team informed Lausch yesterday that they found yet another document with classification markings at Biden’s personal residence in Wilmington.
- The Bureau of Labor Statistics reported Thursday the Consumer Price Index fell 0.1 percent from November to December, while increasing at an annual rate of 6.5 percent—a notable decrease from last month’s year-over-year rate of 7.1 percent and the lowest such measure since October 2021. Declining energy, travel, and used car costs contributed to the slowing, while the price of some food and household items continued to rise. Stocks climbed on the news, with the positive report increasing the likelihood the Federal Reserve only raises interest rates by 25 basis points—rather than 50 or 75—at its next meeting.
- The Treasury Department reported this week the federal government ran a budget deficit of $85 billion in December 2022, a significant increase from the $21 billion deficit it ran in December 2021. Outlays for the month increased 6.3 percent year-over-year—from $508 billion to $540 billion—and government receipts decreased 6.5 percent. Higher borrowing costs for the government due to increased interest rates have played a key role.
- South Korean President Yoon Suk-yeol said for the first time this week that, if North Korea continues to escalate its nuclear threats, Seoul would consider building its own arsenal of nuclear weapons or asking the United States to deploy some of its warheads on the Korean Peninsula. “It’s possible that the problem gets worse and our country will introduce tactical nuclear weapons or build them on our own,” Yoon said. “If that’s the case, we can have our own nuclear weapons pretty quickly, given our scientific and technological capabilities.”
- The House voted 331-97 to pass the Protecting America’s Strategic Petroleum Reserve from China Act, legislation that would prohibit the sale and export of crude oil from the SPR to China or any entity under the control or influence of the Chinese Communist Party. The bipartisan vote comes after presidents of both parties have overseen sales of millions of barrels of oil to Chinese or Chinese-affiliated companies in recent years. It’s unclear whether the Senate will take up the legislation.
- A spokesman for the family of Taylor Dudley—a 35-year-old U.S. citizen and Navy veteran who had been detained in Kaliningrad, Russia since April—announced Thursday Dudley had been released into Poland, where he was greeted by U.S. officials. It’s unclear on what charges Dudley was being held; the spokesman for his family said he had traveled to Poland to attend a music festival and “at some point crossed the Russian border.”
- Nebraska Gov. Jim Pillen announced Thursday that his predecessor, former Gov. Pete Ricketts, would fill retired Sen. Ben Sasse’s U.S. Senate seat through 2024. Ricketts, one of the biggest backers of Pillen’s campaign, said yesterday he was committed to running in both a 2024 special election to serve out the remainder of Sasse’s term and the 2026 election for a full term of his own.
- NASA announced Wednesday researchers had discovered a new exoplanet with the James Webb Space Telescope for the first time. Just 41 light years away, LHS 475 b is almost exactly the same size as Earth, and completes its orbit around a red dwarf star in just two days. Researchers are still working to determine whether LHS 475 b has an atmosphere.
- The average number of weekly confirmed COVID-19 cases in the United States increased about 3.5 percent over the past two weeks according to the Centers for Disease Control, while the average number of weekly deaths attributed to the virus—a lagging indicator—increased 61 percent. About 38,400 Americans are currently hospitalized with COVID-19, up from about 34,100 two weeks ago.
- The Labor Department reported Thursday that initial jobless claims—a proxy for layoffs—decreased by 1,000 week-over-week to a seasonally adjusted 205,000 last week, remaining near historically low pre-pandemic levels.
FTC Says: Don’t Sign It
The Federal Trade Commission has proposed banning non-compete agreements, and the collection of public comments on the proposal is—like most such comment collections—a gallery of frustrated citizens: There’s the biotech startup cofounder upset that pharmaceutical company non-competes have stifled his headhunting. The veterinarian who says she stuck it out at a poorly managed practice until conditions got bad enough that she found a job outside her non-compete radius—120 miles from her husband, visiting only on weekends. The man who recalls borrowing money from his dad to pay lawyers to fight a non-compete after he was fired during a recession.
The FTC’s proposed rule aims to end these workers’ travails. While a handful of states already restrict how companies use non-compete agreements, the FTC would paper over the country’s patchwork regime with a federal ban. Fans of the move say it’ll improve worker pay and boost economic activity, but join the FTC’s critics in acknowledging it could reduce companies’ investment in their workers and is vulnerable to legal challenges.