Although the Obama administration’s effort will be largely symbolic, and have no legal effect, it is important as it may be the first in a series of steps to apply pressure to states or employers that allow restrictions on employee competition. For example, it would not be a surprise to see this President, or a future one, restrict government contracts for employers that require employees to sign non-compete agreements. Other legal avenues of attack may include regulations or enforcement actions under anti-trust laws.
For those businesses that rely on such agreements, this is a major wake-up call as it is the first time a President has taken a position on state laws in this area. If we have another Democratic President, or a change in control of Congress, it is possible this issue could gain more traction.