In order to increase wages and stimulate entrepreneurship, public authorities should take the following measures, as described in the report ”Freedom to Leave” mentioned above: a ban on non-competition for most workers, a ban on anti-franchise anti-poaching agreements, and support for workers and authorities responsible for enforcing their rights. A non-compete agreement is a contract that requires a worker to commit not to become an employee of a competing company or to create a competing business for a period of time after the departure of a business. Typically, companies require a worker to sign such an agreement at the beginning of a new job or position. Workers often receive few advanced warnings, generally do not receive payment during the waiting period and – even if they suspect that an agreement is illegal – receive little recourse to the courts, as remedies in these cases generally do not require employers to pay penalties or pay refunds to aggrieved workers. As a general rule, non-competition agreements or agreements provide that workers cannot work for a competitor or start a business in the same sector within a specified period after the termination of their activity in a given company. In theory, this is a good idea for employers, but are they enforceable? ”Non-poaching” agreements – when employers agree not to hire each other – make it more difficult for workers to be hired by competitors or negotiate better terms of employment. Until a few years ago, these agreements were widespread in the technology sector, but according to the Department of Justice, they are contrary to the right to be. According to the 2016 DOJ for Human Resources Professionals: Some employers are also trying to limit poaching by finding ways to help employees feel connected to the company. They could do this by creating a moralizing corporate culture or by organizing initiatives or activities to make workers feel part of a team. The hope is that this will reduce the likelihood that employees will leave the company for another job. As a result, as research shows, these agreements have a significant impact on professional mobility. Scientific studies have shown that job mobility in Michigan declined by 8% after the state began enforcing competition agreements.
Meanwhile, a 2017 U.S. Census Bureau document found that technology workers in states that impose non-compete agreements had 8 percent fewer jobs over an eight-year period than workers in states that do not allow competition agreements to be enforced.
