Fair Employment Alliance

Why does the FEA oppose noncompetes?

Added by and answered by Becca Quigley

Answer

Noncompetes are damaging on numerous levels. They favor the rights of the employer over the individual, and presume all employees to be bad actors, likely to work against the interests of their former employers. (For a visual, see our infographic “The Problem” on the homepage.)

  1. Noncompetes limit people’s career progression and livelihood by requiring them to leave their fields of expertise if they wish to change jobs.
  2. Noncompetes result in wage suppression. Companies that don’t have to compensate their top talent in order  to keep them can pay lower salaries without fear of repercussions.
  3. Noncompetes limit the growth of robust clusters, particularly in the technology sector. Clusters form as companies grow and “spin out” new companies–which is made possible by the flow of talent and ideas. A robust ecosystem depends on having companies at every stage of development–startups, growth stage, and large established companies. An ecosystem both fortifies a local economy making it more resilient during downturns, and creates competitive advantage within that industry. Noncompetes favor the growth of a small handful of companies in any given industry rather than the development of a rich cluster of companies.

 

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