Non-compete agreements. Ever heard the term? Have you ever had to sign one as part of your job? According to ABC News, the Obama Administration is now calling on all states to make non-compete agreements illegal for most employees.
So what exactly is a non-compete agreement? A non-compete agreement is a legally binding contract that originally functioned as a way of ensuring that employees at high levels (upper-level management and executives) would not steal trade secrets and then gain employment with a competitor and use their original company’s secrets in their new position.
But now they have evolved into something more. Worker’s at all levels of some companies are now required to sign non-compete agreements saying that they will not work for their employer’s competitors during their employment, and sometimes after as well.
For my very first job, at a big-box retailer, I was required to sign a non-compete agreement saying that for the duration of my employment with said retailer, I wouldn’t work for one of their competitors. Keep in mind, this was an entry-level retail position, where I had no access to any specialized or corporate information that I could even begin to steal.
According to Dave Jamieson at the Huffington Post, Jimmy John’s came under fire last year for their oppressive non-compete agreement that stated that an employee agrees not to work for a competitor, which is defined as any business deriving 10% of their sales from sandwiches and lies within three miles of a Jimmy John’s location. This agreement extended for a period of two years following the employee’s departure from Jimmy Johns.
This type of behavior severely limits employees’ ability to seek higher and better wages.
Per NBCNews, The White House says that non-compete agreements interfere with a worker’s ability to be mobile in the workforce and to seek other opportunities that might be available.
The administration asks that state’s ban non-compete agreements for all employees that are not in the know about trade secrets or who fall into other protected categories.
I think it’s time to end the practice of non-compete agreements of low-level employees. They do nothing but limit worker’s ability to find a better job at a higher wage. At that level they do nothing to protect business’s interest.