Why non-compete agreements are unfair to workers

Photo: John Partipilo/States Newsroom

Even some fast food workers have been forced to abide by non-compete clauses

Earlier this month, the Federal Trade Commission proposed a rule prohibiting employers from requiring employees to abide by non-compete agreements as a condition of employment.

The practice of requiring employees to sign a non-compete agreement is not new, but was traditionally required of higher-paid employees to prevent them from taking clients, trade secrets and resources from one firm to another. Unfortunately, it has become more common for low-paying employers such as retail stores and restaurants to require these agreements as well. In New York, for example, some Jimmy Johns franchises had been prohibiting former employees from working for similar restaurants within a three-mile radius for two years after leaving employment.

The only reason for a business to impose non-compete agreements on lower-paid employees is to make it more difficult for them to find better work.

A report from the Economic Policy Institute cites a finding that 51.6% of North Carolina employers require at least one employee to sign a non-compete agreement and 29% require all their employees to sign one. These percentages are among the highest of the larger states and underscore the pervasiveness of this practice. Read more