Employers restrict nearly 1/3 of private-sector employees’ freedom to change jobs

According to a report recently issued by the Economic Policy Institute, at least 36 million employees in the private sector have been compelled to sign purported non-compete agreements that limit where those employees can work after their employment ends with their current employer. This number of restricted employees, which is based on national employer data, represents a significant increase since the Economic Policy Institute last analyzed the extent employers have imposed non-compete prohibitions on employees in 2014.

After carefully reviewing the impact of the increased use of non-compete restrictions on employees, the authors of the report concluded as follows: “Noncompetes limit competition among businesses and stifle workers’ wage growth given that changing jobs is where workers often get a raise. These restrictive agreements are not only inflicted upon high-wage workers, but also low-wage workers living paycheck to paycheck. The rise of noncompetes is likely an important contributor to stagnant wages and declining job mobility in the United States in recent years.”

Fortunately, Minnesota Attorney General Keith Ellison and other leaders at the State level are pursuing ways to reduce the use and negative impact of non-compete prohibitions. In addition, as discussed here previously, courts in Minnesota and across the nation now review non-compete agreements with increasing skepticism – narrowing or even invalidating outright such restrictions of employees’ freedom to earn a living for themselves and their families. Attorneys at Cummins & Cummins, LLP have successfully litigated such cases on behalf of employees in the past and remain ready to assist other employees who face non-compete issues in the future.

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