Leaders

America’s trustbusters plan to curtail the use of non-compete clauses. Good

The clue is in the name

Image: Sébastien Thibault

Three-quarters of Americans who work, do so for a firm. They have contracts setting out their pay, holiday, benefits and sometimes the appropriate way to dress (although not in journalism). A lot of contracts also say whether employees may work for a competitor if they leave the company. It is hard to know what share of American workers are restricted by these non-compete clauses, but the available evidence suggests it may be as high as one in five. More worrying, these clauses are as likely to apply to workers operating deep-fat fryers in fast-food kitchens as they are to workers operating in the conference rooms of white-shoe law firms. The Federal Trade Commission (FTC) has these clauses in its sights, on the grounds that they are anticompetitive and suppress wages.

This article appeared in the Leaders section of the print edition under the headline “The clue is in the name”

From the January 14th 2023 edition

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