Economic Policy Institute: Noncompete agreements – Ubiquitous, harmful to wages and to competition, and part of a growing trend of employers requiring workers to sign away their rights. Report • By Alexander J.S. Colvin and Heidi Shierholz • December 10, 2019

“In recent decades, the U.S. labor market has been marked by rising inequality and largely stagnant wages among all but the highest-paid workers. At the same time, job mobility and other measures of labor market fluidity have declined substantially. There are many factors underlying these trends, but growing empirical evidence suggests that one among the vast set of factors is the rise of the use of noncompete agreements. Noncompete agreements are employment provisions that ban workers at one company from going to work for, or starting, a competing business within a certain period of time after leaving a job. It is not difficult to see that noncompetes may be contributing to weak wage growth, given that changing jobs is how workers often get a raise. And given that noncompetes limit the ability of individuals to start businesses or take other jobs, it also is not difficult to see that noncompetes may be contributing to the declines in dynamism in the U.S. labor market. But how common are they? This report uses data from a national survey of private-sector American business establishments to investigate the extent of noncompete usage. We find:

• Roughly half, 49.4%, of responding establishments indicated that at least some employees in their establishment were required to enter into a noncompete agreement. Nearly a third, 31.8%, of responding establishments indicated that all employees in their establishment were required to enter into a noncompete agreement, regardless of pay or job duties…”