Noncompete Agreements Have Become More Common

Research shows that up to 60 million workers are covered by noncompetes

Roy Maurer By Roy Maurer December 16, 2019
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Noncompete Agreements Have Become More Common

​Somewhere between one-quarter and nearly one-half of private-sector workers are subject to noncompete agreements, employment provisions that ban workers from going to work for—or starting—a competing business within a certain time period after leaving a job, according to a study from the Economic Policy Institute. A 2014 survey found that 18 percent of workers were covered by the covenants.

We've rounded up resources and articles from SHRM Online and other trusted outlets on the news.

[SHRM members-only HR Q&A: Can an employer make noncompete and confidentiality agreements a condition of employment for current employees?]

Noncompetes Limit Mobility, Wages

Critics contend that noncompete agreements reduce competition among businesses and stifle workers' job mobility and wage growth. The clauses were first introduced as a way to prevent upper-level employees from taking trade secrets to rival businesses but have since proliferated to low-wage and low-skill workers.

(Axios)

Bipartisan Action in Congress

The Workforce Mobility Act, a bipartisan bill introduced in October, would ban the use of noncompete agreements except in connection with the dissolution of a partnership or the sale of a business.

(SHRM Online)

Check State Law

Over the last few years, several states have strengthened their noncompete laws or introduced legislation to limit the use of noncompete agreements. With the introduction and passage of more employee-friendly legislation at the state level, it is important that employers understand the noncompete laws that apply to their locations.

(SHRM Online)

Employers Should Carefully Craft Agreements

Businesses should figure out what they are really looking to protect, and they should draft covenants accordingly, said Laurent Drogin, an attorney with Tarter Krinsky & Drogin in New York City. "The narrower the covenant, the greater likelihood it will be enforced."

(SHRM Online)

When Should Employers Use Nondisclosure Agreements?

Many employers opt to use nondisclosure agreements instead of noncompetes to protect their sensitive business information. But when should such agreements be used, and what types of information should be protected? Here's what employment attorneys had to say.

(SHRM Online)

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