Naperville Lawyer Discusses White House’s Statement on Non-Compete Agreements

non-compete agreements, Naperville business lawyerJust a few days ago, in a previous post on this blog, I talked a little bit about the enforceability of non-compete agreements that some employers ask their employees to sign. Specifically, I discussed how non-compete agreement needs to be appropriately limited in its scope and should only be used when an employee going to work for a competitor could seriously damage the company’s interests.

The timing of that post, it seems, was rather appropriate, as non-compete agreements have become a relevant topic of discussion in recent days. They have even garnered the attention of the Obama Administration, which, just this week, urged U.S. states to legislate such agreements out of existence or, at least, to severely curtail their use.

Executive Opinions

Throughout his two terms in office, President Barack Obama has been taking steps to make consumer-friendly and worker-friendly changes to the American marketplace. Earlier this year, President Obama issued an executive order pushing federal agencies to encourage competition in the industries for which the agencies are responsible, such as communications and air travel. However, when the President cannot seem to get federal lawmakers to move on an issue, he turns to a strategy of engaging local and state governments.

Labor laws that govern non-compete agreements are created and enforced at the state level, so any changes that are needed must be made by individual state legislatures. Currently, three states ban non-compete agreements, including California, North Dakota, and Oklahoma. In a statement this week, Vice President Joe Biden encouraged other states to take similar actions.

Real-World Examples

Vice President Biden praised American workers saying that they are “the most dynamic productive workers in the world,” but are often unfairly limited by non-compete agreements. Such agreements often prevent employees from negotiating for higher wages with a new company and finding a new job in the same industry when they are laid off. Biden cited stories he has heard about a teacher in Nebraska who was denied a summer job and a doctor in North Carolina who was not allowed to continue practicing medicine in the same city.

By pushing states to take action against unnecessary non-competes, the Obama administration hopes to foster a more competitive labor market and faster wage growth. Such limits would also increase worker mobility and employability. As part of the effort, the White House is also supporting a research project to learn more about how American employers utilize non-compete agreements and their effects on the labor force.

Questions About Non-Competes?

The debate over non-compete agreements is not likely to end soon, and, as of now, such agreements are legal in the state of Illinois. If you would like to learn more about employment-related contracts, contact an experienced Naperville business law attorney today. Call The Gierach Law Firm at 630-756-1160 to get the answers you need.

 

Sources:

NBC News

USA Today