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Too Many Workers Are Trapped By Non-Competes (bloomberg.com)
Why have wages been so slow to rise at a time when demand for workers has pushed the U.S. unemployment rate to its lowest point in nearly half a century? One answer: contracts that tie millions of unspecialized workers to their jobs. Bloomberg reports: In far too many cases, these so-called noncompetes are an unwarranted restriction on freedom to transact and a drag on growth. If Congress won't act to narrow their scope, states should take the lead. The desire to keep workers from defecting to rival employers is as old as employment itself. As far back as the 15th century, English masters, such as dyers or blacksmiths, made apprentices promise not to set up shop nearby. Courts often refused to uphold such agreements, viewing them as coercive. As a House of Lords decision put it in 1893, "There is obviously more freedom of contract between buyer and seller than between master and servant or between an employer and a person seeking employment."
More than a century later, the idea is back in vogue, as companies exploit the power that comes with increasing size and market concentration. In the U.S., new employees are commonly required to sign contracts that forbid them to work in the same industry for a given period. The practice makes sense for highly paid jobs involving big investments in training, and for staff with valuable proprietary knowledge. But it isn't being limited to those kinds of employees. A 2014 survey found that about two in five workers were or had at some point been bound in this way, including workers such as security guards and camp counselors. Some 12 percent of employees without a bachelor's degree and earning less than $40,000 a year were tied down.
More than a century later, the idea is back in vogue, as companies exploit the power that comes with increasing size and market concentration. In the U.S., new employees are commonly required to sign contracts that forbid them to work in the same industry for a given period. The practice makes sense for highly paid jobs involving big investments in training, and for staff with valuable proprietary knowledge. But it isn't being limited to those kinds of employees. A 2014 survey found that about two in five workers were or had at some point been bound in this way, including workers such as security guards and camp counselors. Some 12 percent of employees without a bachelor's degree and earning less than $40,000 a year were tied down.
Companies should be forced to pay the full salary + benefits + average bonuses for the non-compete period. So if they don't want you working for a competitor for 12 months, then they should give you a full salary for 12 months while you are on gardening leave.
10 years ago, non-competes were invalid under Georgia law. Then we had a referendum on a ballot to put them in. You'd think that normal people would vote against this, right? But here's how it was worded (from ballotpedia.org) on the November 2, 2010 ballot:
And 68% of the idiot voters fell for it.
Perhaps that's a little unfair to the voters. The wording was clearly insanely misleading; to the point where if I were challenging a non-compete in court, I'd probably start with attacking the validity of the ballot referendum as fraudulent (probably a hopeless avenue, I know).