Non-compete clauses can have a chilling effect on employee mobility, which is detrimental to competition in the labour market.
Articles on non-compete agreements
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A range of contractual clauses can be used to limit how and where you work after you leave a job. While they may protect legitimate business interests, their overuse undermines job mobility and innovation.
There are better ways to keep employees on board, such as boosting pay and providing better benefits.
Our concerning finding is “non-compete clauses” are even more widespread in Australia than in the United States. And it’s not only among CEOs: even childcarers and yoga instructors are affected.
While noncompetes may make sense for well-paid executives who possess trade secrets, they make less sense for low-paid workers – yet many are subject to the agreements.
Nearly one in five employed Americans is bound by a contract restricting moves to rival companies. Here’s one way to make those arrangements less common.
Top contributors
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Professor Emeritus of Management, Colorado State University
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Visiting Fellow and Director – Micro heterogeneity and Macroeconomic Performance program, Crawford School of Public Policy, Australian National University
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Professor of Work and Regulation, Queensland University of Technology
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Professor of Work and Organisation, Queensland University of Technology
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Professor of Law, Bond University