The Potential Pitfalls Of Using Non-Competes For Low-Wage Workers

The Bloomberg Editorial Board recently published an article entitled "Too Many Workers Are Trapped By Non-Competes" arguing that the practice of requiring relatively low-wage and/or unskilled workers to sign non-compete agreements is a drag on the economy and is contributing to wage stagnation. The article contends that restricting unspecialized workers' ability to freely change jobs hinders competition in the marketplace and decreases worker bargaining power.

An economist could best say whether the article's assessment of the effects of non-compete agreements on low-wage workers and the U.S. economy more generally is accurate. But as a lawyer who frequently deals with non-compete agreements it is easy to highlight some risks for companies who use non-compete agreements with unspecialized workers en masse.