No one knows what’s in the fine print

The New Way We Work

One in five American workers have signed a noncompete clause in their employment contract, and many likely had no idea what they were agreeing to. Noncompete clauses typically prevent workers from joining competitors for a certain period of time after their employment; and although many people only expect to see those restrictions only in high-level positions, they actually apply to a surprising number of jobs. Low-wage workers in fast-food service, nurses and other healthcare professionals, and even temporary Amazon employees have all found themselves bound by noncompete clauses that make it nearly impossible to find another job. Earlier this spring, the Federal Trade Commission (FTC) banned the use of noncompetes for most workers, prompting legal challenges from business organizations that will continue for many months. But if that ban goes into effect, the FTC believes it could raise wages by as much as $300 million. Evan Starr, an economist and professor of management and organization at the University of Maryland, studies noncompetes and believes the ban would also enable greater innovation, creativity, and entrepreneurship.