Monday, June 9, 2014

The Proliferation of Noncompetition Agreements

Interesting article on the expansion of noncompetition agreements/clauses in today's New York Times. Whereas noncompetes used to be geared mostly towards positions in the technology and related sectors (which positions were highly paid and highly skilled), we are starting to see more and more businesses in other, unrelated areas use them as a tool to keep employees and/or keep departing employees from competing. The Times article notes that non-competes have made their way into jobs such as summer camp counselors and hair stylists. There are policy arguments both for and against noncompetes. Traditionally, the argument was that an employer should be allowed to keep an employee who has been trained and paid well by the employer from competing for a reasonable period of time after the employment relationship ends (based on the notion that the employer spent time and money educating and training the employee). However, noncompetes have made their way into lower-paying, less-skilled positions. It is somewhat difficult to articulate a reasonable basis for such agreements where significant time and expense has not been put into training. The article can be found at