The end of non-compete agreements is a tech job earthquake

The FTC argues that while requiring workers in low-end jobs to sign non-competes is an overstretch, valuable employees shouldn’t be restricted either. After all, the agency claims, “Trade secret laws and non-disclosure agreements (NDAs) both provide employers with well-established means to protect proprietary and other sensitive information. Researchers estimate that over 95% of workers with a non-compete already have an NDA.”

In addition, as FTC Chair Lina M. Khan said: “Non-compete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once non-competes are banned.”

I don’t know if the end of non-competes would do all that. But I do know that in the decades I’ve been writing about technology, I’ve seen non-competes become iron collars around the necks of tech’s best and brightest workers, help desk staffers and even the people who keep the offices clean. 

I understand businesses want to reduce competition and prevent their workers from easily jumping ship, but I’ve never thought non-compete agreements were the right way to do so. Want to keep your best staffers? Pay them, let them work from home, and give them a pathway to promotion. This isn’t rocket science. 

Nevertheless, my attorney friends tell me that their corporate employers or clients had fits when word of the FTC ruling came out. You would have thought a lightning bolt had fried their stock prices out of the blue sky. 

Really? While I was surprised by the FTC action, anyone who’s been paying attention knew that non-compete agreements were getting walloped left, right, and sideways.