For decades, non-compete clauses were used by large businesses to bar former employees from using their expertise against them. Without them, someone well-versed in programming, for example, could make a move to a competing software company and exploit the trade secrets collected in their previous position. Increasingly, non-competes have been popping up in jobs as varied as summer camp counseling, teaching, and even exterminating, severely limiting how a worker can gain experience within their field. And now, the White House is beginning to pay attention.
The White House estimates 20 percent of the workforce is affected by restrictive non-compete agreements, and on Tuesday, the Obama Administration asked for a ban on such clauses for low wage and non-executive level employees. They believe that loosening restrictions on employment would lead to a more competitive job market and faster wage increases.
Speaking on behalf of the Administration, Vice President Joe Biden said he was surprised to hear about situations involving a teacher barred from taking a summer job selling pet food, as well as a laid-off salesman who was prohibited from accepting other sales jobs. The man was forced to tap into his retirement savings.
Currently, only a handful of states have banned non-compete clauses. In the case of California, economists cite the lack of non-competes as a major reason why the tech industry continues to thrive.