Noncompete Contract Clauses are Agreed-Upon Voluntarily

Source: Independent Institute
by William F Shughart II

“Eighteen percent of U.S. workers are bound by noncompete clauses in their employment contracts, according to a story by Dave Michaels and Ryan Tracy on p. A4 of June 9th’s Wall Street Journal. Lina Khan, the anti-Big Tech chairperson of the Federal Trade Commission, says that she wants the FTC to take steps to restrict private businesses’ use of such contractual provisions on the grounds that they ‘can stifle competition for talent.’ Noncompete clauses certainly have that explicit purpose. … If Ms. Khan has her way and two of her Commission colleagues agree to initiate action that does away with noncompete clauses, employers and employees will be worse off. Employees who would have agreed to such restrictions will see reductions in wage offers; employers who would have wanted to limit workforce defections will see more employees jumping ship and revealing sensitive information to their rivals.” (06/14/22)