The White House is calling on states to reconsider their laws legalizing the practice of non-compete agreements in employment contracts due to the restrictive and even manipulative nature of the legal documents.
20 percent of employed Americans are currently operating under non-compete clauses in their employment contracts. These Americans are severely limited in their employment opportunities due to these agreements, and many are pushing for them to be made illegal.
An employee under a non-compete agreement may be barred from seeking employment in similar fields – or any other fields at all – at the request of their employer. Even if an employee is laid off, their non-compete agreements are often still in effect, meaning that they are unable to seek employment again.
Non-compete agreements are often challenged and ruled over in courts. Sometimes they are upheld, while other times they are struck own. Issuing a sweeping ban on the agreements could free up the court system and enable workers a freer marker.
Of the 20 percent of American workers currently under non-compete agreements, 14 percent earn less than $40,000 per year, meaning that these agreements disproportionately affect low-income earners.
The Obama Administration called on the many states to either ban the agreements altogether, though they are willing to compromise. While some argue that non-compete agreements are often necessary, there is little argument in favor of agreements signed after an employee is hired.
The White House is also pushing for the contracts to be invalidated when an employee is laid off so that they may seek to support themselves.