non-competition agreements

On March 7, 2019, a bipartisan group of U.S. Senators sent a letter to the Government Accountability Office (“GAO”), requesting that the agency perform a review of the effect of non-competition agreements “on workers and on the economy as a whole.” The six signatories to the letter were Chris Murphy (D-CT), Todd Young (R-IN), Elizabeth Warren (D-MA), Marco Rubio (R-FL), Tim Kaine (D-VA), and Ron Wyden (D-OR). In particular, they asked the GAO to assess:

  1. What is known about the prevalence of non-compete agreements in particular fields, including low-wage occupations?
  2. What is known about the effects of non-compete agreements on the workforce and the economy, including employment, wages and benefits, innovation, and entrepreneurship?
  3. What steps have selected states taken to limit the use of these agreements, and what is known about the effect these actions have had on employees and employers?

The letter is but the latest in numerous efforts at the federal level (including prior legislation introduced by Senators Warren and Rubio) to shine a spotlight on, and limit, the use of non-competes by employers, particularly with regard to low-wage or entry level employees. Thus far, bills introduced on this issue in Congress have failed to gain traction, but a GAO review on the topic could be used to support such legislation in the future.