Noncompete agreements, which restrict who employees can work for after leaving a company, have become well-established in Pittsburgh. Some local hairstylists, for example, who are unhappy with their jobs must either stay with those jobs, move to another area, or change fields entirely, throwing away years of training and experience.
Federal or state government should scrap these oppressive and restrictive contracts. California, North Dakota, Oklahoma and Washington, D.C., have already banned them. In Pennsylvania, however, noncompete agreements apply to, among others, software engineers, graphic designers, surgeons, lawyers and even hairstylists.
In a prepared statement, the U.S. Chamber of Commerce calls the contracts “an important tool in fostering innovation” to protect trade secrets, specialized employee training and client retention. But noncompete agreements also prevent people from leaving for better paying jobs and keep them tethered to business owners who ignore their best interests. Noncompete agreements have kept 30 million Americans from netting $300 billion in wage increases annually, reports the Federal Trade Commission. Preliminary findings by the FTC also show they stifle competition and, therefore, violate federal law.
The agency is considering banning noncompete agreements nationwide. It should.
A proposed FTC rule would prevent employers from restricting workers’ opportunities and limiting competition, Elizabeth Wilkins, an FTC director, said in a prepared statement. The FTC will accept public comment, until March 20, on banning the agreements.
A skill is not a trade secret, and most employees know the difference. Businesses worried about trade secrets can use nondisclosure agreements to limit what knowledge employees take with them after quitting — without hobbling employment possibilities.
People quit their jobs for many reasons. Few do so to hurt their employers — in fact, most people quit for self-preservation. One 2021 study showed most Americans leave their jobs because they feel underpaid, disrespected or without opportunities for advancement. Rather than remain unhappy, people choose to move on. They should be able to do so, without fear of retaliation. Federal and state laws can, and should, protect businesses without hurting former employees.
