This article “Companies Compete but Won’t Let Their Workers Do the Same” is a thoughtful piece and there is much I agree with, especially in regard to lower wage workers and the depressing effect of non-competes on wages. But the author fails to note the real reason why non-competes are popular: companies invest in their employees in developing relationships with customers and in learning technology. Smaller companies that don’t have non-competes for key personnel are difficult to sell. And companies take a real risk that employees will simply learn from the experience of a job and hand a customer list on a platter to the competitor. So in the absence of a non-compete, many companies won’t invest or trust their employees. That can slow the growth of companies.
Moreover, in some states, companies pay employees to sign a non-compete. In the Midwest, companies don’t need to do that. That is wrong. Companies should pay a premium for workers limiting post-job options.
But California is hardly the panacea the author claims. I have represented many employees who have been threatened with aggressive approaches to trade secrets violations by their former California employer. In other words, when the former employer can’t use a non-compete, they find other paths.
Are non-competes over-used? Undoubtedly.
Should the public and Congress take notice? Yes.
Should they be eliminated? No.
Resource: “Companies Compete but Won’t Let Their Workers Do the Same“. by Orley Lobel, The Opinion Pages, NY Times. 4 May, 2017, Web.
