Business
Column: A Trump judge blocks another pro-worker Biden initiative, this one involving noncompete clauses
Noncompete clauses in employment contracts are sterling examples of the give-them-an-inch-and-they’ll-take-a-mile principle in business behavior.
Once applied chiefly to executives, engineers and others with access to a company’s trade secrets, they have expanded to cover almost anybody — low-wage security guards, rank-and-file factory workers and even fast-food counter workers.
A recent academic survey estimated that nearly 1 in 5 American workers, or about 30 million people, are subject to noncompetes.
Noncompetes have long faced significant legal hostility because of their often blunt prohibition on employee mobility.
— Starr, Prescott and Bishara (2020)
Although the provisions are often described as noncompete “agreements,” the survey found that the vast majority of workers haven’t negotiated any such agreement with their employers, and about one-third are presented with the restriction after they’ve already accepted a job offer.
A couple of other points: Noncompetes tend to suppress wages. They also undermine innovation.
For these and other reasons, the Biden administration took aim at noncompete clauses in 2021, instructing the Federal Trade Commission to “curtail” those that “may unfairly limit worker mobility.”
After more than a year of study, the FTC followed through with a proposed rule, issued April 23 and scheduled to take effect Sept. 4, that banned new noncompetes and forbade the enforcement of existing clauses except for senior executives who were already subject to the restrictions.
You probably know what happened next: Big Business, in the guise of the U.S. Chamber of Commerce, sued to block the FTC’s rule. The lawsuit was filed not in Washington, D.C., where the agency resides, but in Texas, where it was almost certain to come before a conservative judge appointed by a Republican.
Sure enough, it came before Federal Judge Ada Brown of Dallas, a Trump appointee, who on July 3 blocked the FTC from implementing or enforcing its rule until further notice.
Brown says she will rule by Aug. 30, less than a week before the rule is set to take effect, on whether her decision will give relief only to the plaintiffs in the case — a Dallas tax firm founded by a former tax advisor to then-President Trump, the Chamber of Commerce, and other business associations — or apply nationwide.
Here’s the background.
As the academic economists observed in their survey, published in 2020, “noncompetes have long faced significant legal hostility because of their often blunt prohibition on employee mobility.” But they’ve been tolerated as long as they applied only to high-profile executives or professionals who might have access to proprietary information or clients.
Only three states outlaw noncompete clauses: California (where they were rendered unenforceable by law in 1872), Oklahoma and North Dakota. The New York Legislature voted to outlaw them last year, but Gov. Kathy Hochul vetoed the bill, bowing to pressure from Wall Street and business lobbyists.
The chamber’s lawsuit is chock full of risible misrepresentations. “For hundreds of years,” it says, “employers and workers have had the freedom to negotiate mutually beneficial non-compete agreements.” Among their virtues, the chamber asserts, is that they “incentivize investment in research and development … and facilitate the sorts of collaborative work environments needed for firms to innovate.”
The truth is just the opposite. Leaving aside the flagrant lie that noncompete clauses are the product of employer-employee “agreements,” evidence for the drawbacks of noncompete clauses — and for the value of eliminating them — is indisputable. One need not look further than the explosion of innovation in Silicon Valley, which was built by talented scientists and engineers who had the freedom to move from firm to firm, or start their own without interference from their employers.
Among the 400 engineers attending a 1969 conference in Silicon Valley (which had not yet been christened with that name), all but a couple of dozen had worked at one time or another for a single firm, Fairchild Semiconductor — which had been founded by eight former workers at Shockley Semiconductor Laboratory, some of whom would go on to found Intel Corp.
Nothing obstructed their movement — or the extraordinary level of innovation that made the valley what it remains today, the world’s leading center for technological research and development.
The economists — Evan Starr of the University of Maryland and J.J. Prescott and Norman Bishara of the University of Michigan — found that noncompete clauses keep wages low by blocking competition for workers among competing businesses. Some employers, they wrote, impose noncompete rules even when they’re legally unenforceable, in hopes that the mere threat of liability for breaching an employment contract will keep workers in place.
Big Business doesn’t have much of a case in favor of noncompete clauses. They’re the antithesis of the principles supposedly honored by “right to work” antiunion laws so beloved by employers and conservative politicians. They do, however, have a well-marked capacity to suppress wages and lock workers in lousy jobs.
There can be no question that the imposition of noncompete clauses has reached an absurd level.
The fast-food chain Jimmy John’s, for example, prohibited its employees from working at any other business that sells “submarine, hero-type, deli-style, pita, and/or wrapped or rolled sandwiches” within up to three miles from any Jimmy John’s store and for two years after leaving the company, according to a lawsuit filed in 2016 by Illinois Atty. Gen. Lisa Madigan. The franchisor agreed to drop the clause to settle Madigan’s lawsuit and a second lawsuit filed by New York state.
Last year, the FTC sued two affiliated Michigan security firms, Prudential Security and Prudential Command, for requiring low-wage security guards to sign contracts prohibiting them from working for any competitor within 100 miles of their jobs for two years of leaving Prudential. The firms threatened the guards with $100,000 in penalties for violating the clause.
The agency also sued two glass container firms, O-I Glass of Ohio and Luxemburg-based Ardagh Group, over noncompete clauses imposed on a combined 1,700 furnace workers and other employees. Those clauses stifled innovation and competition in the glass industry, the FTC said, because it prevented rivals from finding skilled and experienced workers in an already highly concentrated industry.
Prudential’s owners and the glass companies all agreed to bans on imposing or enforcing their noncompete clauses on present or future employees.
In its current lawsuit in Texas, the Chamber of Commerce asserts that the FTC’s proposed ban on noncompete clauses exceeds the authority it was granted by Congress.
Its point, which was accepted in full by Brown, is that the agency is authorized only to make rules dealing with “unfair or deceptive acts or practices,” not “unfair methods of competition.” (The FTC responds that the “clear language” of the 1914 FTC Act gives it full authority to “prevent unfair methods of competition through … rulemaking.”)
There’s more to the chamber’s lawsuit, however. It’s part of a concerted effort by the business community to undermine FTC Chair Lina Khan, who has worked hard to turn the agency into the vigorous protector of consumer rights that Congress envisioned in 1914, but which a succession of leaders allowed to fade into near-uselessness.
Taking a cue from attacks by Elon Musk and Trader Joe’s on the National Labor Relations Board, the chamber contends that the FTC itself is unconstitutional, because its commissioners can’t be removed by the president at will — they serve for seven years and can be removed only for “inefficiency, neglect of duty, or malfeasance in office.”
(Franklin Roosevelt learned this the hard way, when the Supreme Court overturned his firing of a Republican FTC commissioner in 1935; FDR’s irritation at that decision contributed to his decision to pursue a court-packing scheme, which failed.)
The federal courts generally haven’t looked kindly on these collateral attacks on federal agencies, however.
In filing its lawsuit, the chamber followed Big Business’ familiar and cynical practice of “forum-shopping,” or hunting for a federal court predestined to see things its way and willing to issue nationwide injunctions blocking Biden initiatives. For this case, it settled on federal court in Dallas, where only one of the eight sitting judges was appointed by a Democrat (Bill Clinton). Of the remaining seven, three are Trump appointees, including Brown.
Forum-shopping, especially among federal courts in Texas, has become such an embarrassment to the federal judiciary that the Judicial Conference of the United States, which sets policy for the federal courts, issued a statement in March calling on the district courts to find fairer ways to assign cases so they don’t all go to GOP-appointed judges.
David Godbey, the chief judge of the Northern District of Texas, where the chamber’s case landed, has refused to do so. Godbey is an appointee of George W. Bush. In any event, the likelihood that random assignment of the chamber’s lawsuit would be heard by a Republican appointee was obviously strong. Any appeal from Brown’s ruling would come before the U.S. 5th Circuit Court of Appeals, the dumbest and most reactionary appellate court in the land.
It’s likely that this issue will land before the Supreme Court. A second case challenging the FTC rule brought by a Philadelphia-area tree-trimming service backed by a right-wing legal foundation is being heard by a Biden-appointed judge, Kelley Brisbon Hodge, who says she will issue a preliminary ruling by July 23. If she backs the FTC and is upheld by the U.S. 3rd Circuit Court of Appeals, the Supreme Court may have to take the case to resolve any conflict. That means the FTC rule is likely to remain in limbo well into next year, or even beyond.
President Trump on Friday directed federal agencies to stop using technology from San Francisco artificial intelligence company Anthropic, escalating a high-profile clash between the AI startup and the Pentagon over safety.
In a Friday post on the social media site Truth Social, Trump described the company as “radical left” and “woke.”
“We don’t need it, we don’t want it, and will not do business with them again!” Trump said.
The president’s harsh words mark a major escalation in the ongoing battle between some in the Trump administration and several technology companies over the use of artificial intelligence in defense tech.
Anthropic has been sparring with the Pentagon, which had threatened to end its $200-million contract with the company on Friday if it didn’t loosen restrictions on its AI model so it could be used for more military purposes. Anthropic had been asking for more guarantees that its tech wouldn’t be used for surveillance of Americans or autonomous weapons.
The tussle could hobble Anthropic’s business with the government. The Trump administration said the company was added to a sweeping national security blacklist, ordering federal agencies to immediately discontinue use of its products and barring any government contractors from maintaining ties with it.
Defense Secretary Pete Hegseth, who met with Anthropic’s Chief Executive Dario Amodei this week, criticized the tech company after Trump’s Truth Social post.
“Anthropic delivered a master class in arrogance and betrayal as well as a textbook case of how not to do business with the United States Government or the Pentagon,” he wrote Friday on social media site X.
Anthropic didn’t immediately respond to a request for comment.
Anthropic announced a two-year agreement with the Department of Defense in July to “prototype frontier AI capabilities that advance U.S. national security.”
The company has an AI chatbot called Claude, but it also built a custom AI system for U.S. national security customers.
On Thursday, Amodei signaled the company wouldn’t cave to the Department of Defense’s demands to loosen safety restrictions on its AI models.
The government has emphasized in negotiations that it wants to use Anthropic’s technology only for legal purposes, and the safeguards Anthropic wants are already covered by the law.
Still, Amodei was worried about Washington’s commitment.
“We have never raised objections to particular military operations nor attempted to limit use of our technology in an ad hoc manner,” he said in a blog post. “However, in a narrow set of cases, we believe AI can undermine, rather than defend, democratic values.”
Tech workers have backed Anthropic’s stance.
Unions and worker groups representing 700,000 employees at Amazon, Google and Microsoft said this week in a joint statement that they’re urging their employers to reject these demands as well if they have additional contracts with the Pentagon.
“Our employers are already complicit in providing their technologies to power mass atrocities and war crimes; capitulating to the Pentagon’s intimidation will only further implicate our labor in violence and repression,” the statement said.
Anthropic’s standoff with the U.S. government could benefit its competitors, such as Elon Musk’s xAI or OpenAI.
Sam Altman, chief executive of OpenAI, the company behind ChatGPT and one of Anthropic’s biggest competitors, told CNBC in an interview that he trusts Anthropic.
“I think they really do care about safety, and I’ve been happy that they’ve been supporting our war fighters,” he said. “I’m not sure where this is going to go.”
Anthropic has distinguished itself from its rivals by touting its concern about AI safety.
The company, valued at roughly $380 billion, is legally required to balance making money with advancing the company’s public benefit of “responsible development and maintenance of advanced AI for the long-term benefit of humanity.”
Developers, businesses, government agencies and other organizations use Anthropic’s tools. Its chatbot can generate code, write text and perform other tasks. Anthropic also offers an AI assistant for consumers and makes money from paid subscriptions as well as contracts. Unlike OpenAI, which is testing ads in ChatGPT, Anthropic has pledged not to show ads in its chatbot Claude.
The company has roughly 2,000 employees and has revenue equivalent to about $14 billion a year.
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By Kirsten Grind, Melanie Bencosme, James Surdam and Sean Havey
February 27, 2026
Business
Commentary: How Trump helped foreign markets outperform U.S. stocks during his first year in office
Trump has crowed about the gains in the U.S. stock market during his term, but in 2025 investors saw more opportunity in the rest of the world.
If you’re a stock market investor you might be feeling pretty good about how your portfolio of U.S. equities fared in the first year of President Trump’s term.
All the major market indices seemed to be firing on all cylinders, with the Standard & Poor’s 500 index gaining 17.9% through the full year.
But if you’re the type of investor who looks for things to regret, pay no attention to the rest of the world’s stock markets. That’s because overseas markets did better than the U.S. market in 2025 — a lot better. The MSCI World ex-USA index — that is, all the stock markets except the U.S. — gained more than 32% last year, nearly double the percentage gains of U.S. markets.
That’s a major departure from recent trends. Since 2013, the MSCI US index had bested the non-U.S. index every year except 2017 and 2022, sometimes by a wide margin — in 2024, for instance, the U.S. index gained 24.6%, while non-U.S. markets gained only 4.7%.
The Trump trade is dead. Long live the anti-Trump trade.
— Katie Martin, Financial Times
Broken down into individual country markets (also by MSCI indices), in 2025 the U.S. ranked 21st out of 23 developed markets, with only New Zealand and Denmark doing worse. Leading the pack were Austria and Spain, with 86% gains, but superior records were turned in by Finland, Ireland and Hong Kong, with gains of 50% or more; and the Netherlands, Norway, Britain and Japan, with gains of 40% or more.
Investment analysts cite several factors to explain this trend. Judging by traditional metrics such as price/earnings multiples, the U.S. markets have been much more expensive than those in the rest of the world. Indeed, they’re historically expensive. The Standard & Poor’s 500 index traded in 2025 at about 23 times expected corporate earnings; the historical average is 18 times earnings.
Investment managers also have become nervous about the concentration of market gains within the U.S. technology sector, especially in companies associated with artificial intelligence R&D. Fears that AI is an investment bubble that could take down the S&P’s highest fliers have investors looking elsewhere for returns.
But one factor recurs in almost all the market analyses tracking relative performance by U.S. and non-U.S. markets: Donald Trump.
Investors started 2025 with optimism about Trump’s influence on trading opportunities, given his apparent commitment to deregulation and his braggadocio about America’s dominant position in the world and his determination to preserve, even increase it.
That hasn’t been the case for months.
”The Trump trade is dead. Long live the anti-Trump trade,” Katie Martin of the Financial Times wrote this week. “Wherever you look in financial markets, you see signs that global investors are going out of their way to avoid Donald Trump’s America.”
Two Trump policy initiatives are commonly cited by wary investment experts. One, of course, is Trump’s on-and-off tariffs, which have left investors with little ability to assess international trade flows. The Supreme Court’s invalidation of most Trump tariffs and the bellicosity of his response, which included the immediate imposition of new 10% tariffs across the board and the threat to increase them to 15%, have done nothing to settle investors’ nerves.
Then there’s Trump’s driving down the value of the dollar through his agitation for lower interest rates, among other policies. For overseas investors, a weaker dollar makes U.S. assets more expensive relative to the outside world.
It would be one thing if trade flows and the dollar’s value reflected economic conditions that investors could themselves parse in creating a picture of investment opportunities. That’s not the case just now. “The current uncertainty is entirely man-made (largely by one orange-hued man in particular) but could well continue at least until the US mid-term elections in November,” Sam Burns of Mill Street Research wrote on Dec. 29.
Trump hasn’t been shy about trumpeting U.S. stock market gains as emblems of his policy wisdom. “The stock market has set 53 all-time record highs since the election,” he said in his State of the Union address Tuesday. “Think of that, one year, boosting pensions, 401(k)s and retirement accounts for the millions and the millions of Americans.”
Trump asserted: “Since I took office, the typical 401(k) balance is up by at least $30,000. That’s a lot of money. … Because the stock market has done so well, setting all those records, your 401(k)s are way up.”
Trump’s figure doesn’t conform to findings by retirement professionals such as the 401(k) overseers at Bank of America. They reported that the average account balance grew by only about $13,000 in 2025. I asked the White House for the source of Trump’s claim, but haven’t heard back.
Interpreting stock market returns as snapshots of the economy is a mug’s game. Despite that, at her recent appearance before a House committee, Atty. Gen. Pam Bondi tried to deflect questions about her handling of the Jeffrey Epstein records by crowing about it.
“The Dow is over 50,000 right now, she declared. “Americans’ 401(k)s and retirement savings are booming. That’s what we should be talking about.”
I predicted that the administration would use the Dow industrial average’s break above 50,000 to assert that “the overall economy is firing on all cylinders, thanks to his policies.” The Dow reached that mark on Feb. 6. But Feb. 11, the day of Bondi’s testimony, was the last day the index closed above 50,000. On Thursday, it closed at 49,499.50, or about 1.4% below its Feb. 10 peak close of 50,188.14.
To use a metric suggested by economist Justin Wolfers of the University of Michigan, if you invested $48,488 in the Dow on the day Trump took office last year, when the Dow closed at 48,448 points, you would have had $50,000 on Feb. 6. That’s a gain of about 3.2%. But if you had invested the same amount in the global stock market not including the U.S. (based on the MSCI World ex-USA index), on that same day you would have had nearly $60,000. That’s a gain of nearly 24%.
Broader market indices tell essentially the same story. From Jan. 17, 2025, the last day before Trump’s inauguration, through Thursday’s close, the MSCI US stock index gained a cumulative 16.3%. But the world index minus the U.S. gained nearly 42%.
The gulf between U.S. and non-U.S. performance has continued into the current year. The S&P 500 has gained about 0.74% this year through Wednesday, while the MSCI World ex-USA index has gained about 8.9%. That’s “the best start for a calendar year for global stocks relative to the S&P 500 going back to at least 1996,” Morningstar reports.
It wouldn’t be unusual for the discrepancy between the U.S. and global markets to shrink or even reverse itself over the course of this year.
That’s what happened in 2017, when overseas markets as tracked by MSCI beat the U.S. by more than three percentage points, and 2022, when global markets lost money but U.S. markets underperformed the rest of the world by more than five percentage points.
Economic conditions change, and often the stock markets march to their own drummers. The one thing less likely to change is that Trump is set to remain president until Jan. 20, 2029. Make your investment bets accordingly.
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