Noncompetes are nonsense. I have seen firsthand how they can stifle career and wage-growth opportunities when an employer is determined enough to protect its territory. Of course, this requires an investment in time and capital for legal expenses; but if a non-compete has been signed the employer has the law (somewhat) on their side.
Many non-competes have been shown to be overly-broad (especially in length of time) and courts can deem such agreements as completely illegal and won’t uphold them, or more likely reduce the length and/or scope of the non-compete to what they see as more reasonable.
The NY Times put out a great article today about non-compete reform in a number of states. I believe this is much needed, especially in sectors I know closely, like tech and advertising (not to mention adtech), where mobility is key for career advancement, and job-hopping, especially at the bottom of the food-chain, is quite regular.
The Times article cites that employers will commonly claim non-competes are to protect them against damaging disclosure of protected information such as customer lists, technological secrets or proprietary business models, which could cause irreparable harm to the firm. While this may be true, a non-compete is certainly not needed to curb illegal disclosures.
It is quite common for firms to have employees sign NDAs (non-disclosure agreements), which should suffice to protect them against harmful disclosures upon an employee’s new employment. In tech NDAs are requisite.
This is especially important because non-competes can be used as a tool, either implicitly or explicitly, to keep wages depressed and stifle career advancement. From a more macro view, it can’t be net positive to have employees locked into firms, reducing motivation, skill-building and in turn, productivity. Competition is the lifeblood of American capitalism; it should exist for both employers and employees.
Aryeh Carni
ARYEH CARNI 