Companies need talented employees. This sometimes leads businesses to force employees to sign “non-compete” agreements that prevent workers from taking jobs at other companies in which similar skills or knowledge is involved. A recent article published by the Ewing Marion Kauffman Foundation analyzes the impact of these agreements on young, entrepreneurial companies.
According the the Kauffman Foundation, the number of workers subject to non-compete agreements is growing. While non-competes may seem beneficial for individual companies, the impact of these agreements is bad for society as a whole. They can prevent workers from taking the job of their choice and make talented employees unavailable to younger companies and entrepreneurs.
Not all governments are willing to enforce non-compete agreements in their legal systems. Research in the U.S. has shown that talented workers often leave states that restrict their employment choices in this way to move to states that do not enforce these agreements. The Kauffman Foundation offered four ideas for improving non-compete agreements in places where they are enforced:
- Mandate early disclosure to job seekers,
- Limit the duration of the agreement to no more than one year,
- Limit the number of industries included in the agreements, and
- Require companies to provide additional compensation to employees who are subject to non-competes.
To read the full article, please click here.
Contributed by Haley Goodman.