Non-compete Agreements Have Potential to Hurt and Trap Employees

Non-compete agreements have become more common to lock in employees from working with competitors.  Traditionally non-compete agreements were used for senior executives, inventors and highly paid employees, but recently non-compete agreements have become more widespread among American workers.

Enforcement of these agreements has led to legal battles that substantially impact employees, depleting savings and forcing some to take low-skilled jobs, since they could no longer work in their profession.   Non-compete lawsuits by employers against employees have tripled since 2000.

Non-compete agreements have negative effects on the economy.  Skilled workers may leave states that allow vigorous enforcement of non-compete agreements, creating brain drain from those states and subsequently making it more difficult for those states to prosper.  Wages are lower in states that allow businesses to strictly enforce non-compete agreements.  Companies know in certain states employees can’t leave their positions, due to these agreements.   Since employees are trapped in these positions, employers are less likely to award bonuses, raises, and other compensation increases or incentives.  Lack of competition is encouraged by these restrictions and certainly make it harder for employees to get ahead.

Many workers are not aware that they are subject to non-compete agreements as they are often hidden among many documents one signs when hired.  Even if workers are aware of the agreements they might need a job and have no choice but to sign.  The non-compete agreements are typically introduced when employees are brand new and lack negotiating leverage.  Make sure you read all agreements with your employer carefully before signing and know that you have a choice.

Henrichsen Siegel has decades of experience in representing employees and their rights.  If you feel that you may be trapped by a non-compete agreement, please contact us here.

To read more on non-compete agreements.