Non-Compete Clauses Are Spreading and Holding Back Economic Growth
The fine print that follows you out the door: non-compete clauses are spreading
New OECD evidence reveals that non-compete clauses have quietly spread far beyond executives to cover low-wage workers and those with no access to trade secrets. These often unenforceable restrictions create a chilling effect, preventing job mobility, stifling entrepreneurship, and dragging down productivity across OECD economies. Rather than protecting legitimate business interests, this fine print is now a significant barrier to a dynamic labor market.
The mere presence of a clause — and the belief that it might be enforced — is often enough to keep people from moving.
- helterskelter
Story time for NC's. I had a doctor that lived near me working at a medical clinic that got bought up by PE. He signed the new contract with them and kept working for a while, but decided he needed to move for one reason or another. After he quits, PE informs him of the NC in the new contract he signed, and that he wouldn't be able to practice medicine for N years (I think it was something like 5). He ended up hanging himself, and in response, the clinic's staff quit en masse and basically dared the PE company to try and enforce the clause. PE backed down because suing all the doctors individually would have cost too much and it would have been awful PR for the practice. They ended up selling the clinic before the year was out.
- rrrrrrrrrrrryan
There's a strong argument to be made that the banning of non-competes is the main reason California is the software capital of the world.
- RayVR
Non-competes in finance almost always come with compensation during the defined period.
The idea that a company can restrict at-will employee’s post-separation employment is absurd if they aren’t compensating the individual.
In many US states and countries outside the US, the enforcement of non-competes is very very hard. The problem is that they create a RISK of enforcement.
- jmward01
These are often not disclosed until you start. Day 1 'paperwork' that drastically changes the agreed upon terms of employment well after you have left a previous position. In some cases they are even forced on you after having worked somewhere for a while and future employment is predicated on them. They are evil. I almost quit my job over this, but of course how can you afford to not work while searching? And searching while out of work is far harder than while still working. We need penalties on companies that do this, not just a ban. 'Sign this or you are fired' documents after you are hired should have repercussions.
- jmcgough
Thankful that California banned them, others should follow suit.