The White House has issued a Fact Sheet addressing what the administration views as overuse of noncompete agreements to the detriment of the nation’s workforce. One in five workers is bound by a noncompete agreement, according to the Fact Sheet, and 14 percent of those workers make less than $40,000 per year.
The administration claims that noncompetes can stifle employee mobility and suppress wages. As a result, it is calling on state policy makers to improve the transparency and fairness of noncompete agreements by prohibiting them unless they are proposed before a job offer or significant promotion has been accepted.
The Fact Sheet is in follow-up to President Obama’s Executive Order of April 15, 2016, and makes reference to the guidance published by the Federal Trade Commission and U.S. Department of Justice, also appearing in Hot Topics today.