The end of non-compete agreements nationally
Source: Carey & Associates, PC
By Mark Carey
The epidemic use of non-compete agreements has gotten out of control and too many employees have needlessly and financially suffered under this onerous default management practice. The end of this BS employment practice has now arrived!
Non-compete agreements were created by employers for employers. Roughly half of private-sector businesses require at least some employees to enter NCAs, affecting some 36 to 60 million workers. Employees never had a chance to negotiate these agreements.
[President Biden’s] Executive Order banning non-compete agreements marks the beginning of the end of abusive management practices that has enveloped the nation’s workforce since the founding of this country.
Nick’s take on NCAs
We have discussed NCAs here many times, including advice about how to negotiate NCAs. If you’re lucky, you’ve never had to contend with the kind of corporate extortion these agreements represent. It seems the end is near for NCAs, though it seems the Federal Trade Commission still must go through a rule-making process.
Have you ever been under an NCA? Did you have a choice about signing it? How did it affect you? Have you ever refused an NCA? What was the result? Maybe you’re an employer and would like to defend NCAs. We’re listening! The times they are a-changin’!
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I live and work in California – even though we have high taxes, we have a lot of opportunities and non-compete agreements are illegal for employees. Our economy is not exactly hurting – it is the fifth largest economy in the world.
I’ve been hobbled and handcuffed by NCAs, more so in recent times, and in recent positions.
In my state, it’s reasonably easy to get out of/get around NCAs. The neighboring state I work in, not so much. Depends on which state you signed the NCA in.
A man in my church is an Employment Attorney. He’s told me things he doesn’t tell his clients. In his 20+ years of practice, unless it’s some high powered executive, he’s yet to see a judge even allow litigation in their courts if it’s some average Joe who made say $80K, and the former employer tries going after him. The premise is “you can’t prevent a person from earning a living”.
One thing the attorney parishioner did tell me is while most legislators in the neighboring state I work in want to end this Draconian practice, with term limits, many of these legislators fear repercussions from employers when trying to find employment in the private sector, thus, they don’t get rid of the NCAs.
While I’m definitely no fan of Biden, and see this as woosey-woosey progressive fluff on a toothless executive order, I do hope I’ll live to see the day when NCAs, and at will employment, will be eliminated.
This seems to be a positive step from Biden but I would caution anyone from assigning positive steps to politicians specifically – although this helps makes complicated things much simpler to think about. But to suggest industry isn’t OK with this is naive. There are other tools.
Go beneath the headlines and look at the unemployed. These people, some of whom are college educated which is rarely proclaimed, have a choice of lower paying service jobs where blacklisting is probably more of a concern and non-compete agreements don’t usually apply.
Noncompetes often exist in medical employment contracts. Physicians get bound by them, they have no choice usually. The reptiles that run large corporate healthcare big boxes like to claim the LIE that the employee doctor will compromist “trade secrets”.
THERE ARE NO TRADE SECRETS IN MEDICINE.
Trade secrets in medicine are considered unethical. What other trade secrets? The phone number of the waste company that dumps the needle boxes? The fee schedule (based on Medicare fee schedule, which is a public document).
I’ve seen noncompetes used in small towns, where the loss of even one doctor makes a big difference, and patient care compromised when a hospital or a doctor group have a falling out. Instead of “live and let live” like adults, they take the ball and go home. And the community’s patients suffer when they have to travel 50 miles to fine another doctor.
The “can’t maintain the quality” lie is another one. They need the noncompetes to build a network of doctors. California does not allow noncompetss at all, by statute tested in the courts for a century. Somehow Stanford, UCLA, Scripps, etc., all seem to survive. Massachusetts does not allow noncompetes in physician employment contracts. Massachusetts has its share of problems, but I dont see people sighing “I wish we had noncompetes”. Again, somehow Harvard, Mass General, etc., seem to survive.
And, of course, as many of you already know…..noncompetes in LAWYER employment contracts are considered the unethical practice of law, everywhere in the country.