Concerns as to Non-Compete Agreements Raised by U.S. Treasury.
In March 2016, the U.S. Treasury Office of Economic Policy issued a report, Non-Compete Contracts: Economic Effects and Policy Implications, in which it identified potential hazards non-compete contracts cause to both individuals and the national economy. The White House, in a follow-up summary, described non-compete agreements as “institutional changes in labor markets,” noting that such agreements currently impact one-fifth of U.S. workers, including a large number of low-wage workers. The negative impact from widespread use of non-compete agreements include: (1) low mobility rates of U.S. workers, which in turn depress competitive wages, and (2) a decreasing number of new firms, a loss to both innovation and consumer competition.
This seven-part blog series tackles each concern through the lens of a Colorado resident, and offers tips for success in your employment relations.
The seven areas of concerns raised by the White House are:
(1) Low-wage workers who are unlikely to possess trade secrets are compelled to sign non-compete agreements.
(2) Workers do not receive non-compete agreements with the job offer; they first receive them after accepting the job offer and after they have already declined other job offers.
(3) Non-compete agreements are often confusing to workers who don’t understand their rights.
(4) Workers may be subject to overly broad or unenforceable non-compete agreements.
(5) Employers requiring non-competes often do not provide “consideration” above and beyond continued employment.
(6) Non-competes may affect workers who are fired without cause from finding new employment.
(7) Non-competes may restrict consumer choice for critical goods and services.
For a copy of the White House report, click here.
For a copy of the U.S. Treasury Office of Economic Policy report, click here.
White House Document, “Non-Compete Agreements: Analysis of the Usage, Potential Issues and State Responses,” Dated May 2016, PDF document accessed from WhiteHouse.gov on November 15, 2016.