How Non-Compete Contracts Hurt Employees

Non-compete agreements help protect a company’s intellectual and physical assets, but they can also objectify and entrap the employees who sign them. These claustrophobic contracts essentially prevent employees from searching for greener pastures when they have a specific set of skills that only a select number of employers are searching for. While these contracts might work great for companies, they can financially, intellectually, and emotionally harm the employees.


Non-compete contracts can prevent talented employees from leaving their current employers for a similar company that pays better. When it is discovered that rival companies are working together to control and potentially cap how much employees are paid, these employers are violating antitrust laws and should be held accountable. Those found guilty of antitrust laws and price-fixing may be subject to, among other things, extensive monetary damages.


An employee can only be as innovative as the environment they work in. This means if they’re confined to working for a specific company versus its competitors, they will likely suffer intellectually. “This whole non-compete scenario stifles innovation. Without the ability to take what you’ve learned and applied it somewhere else, you have no ability to make your own destiny,” Damien Patton, CEO of Banjo explained to Fortune Magazine. Employees have fewer incentives to develop new skills and knowledge when they realize they cannot transfer a specific set of skills to a rival company that may compensate their employees better.


If an employee is having a difficult time in their current office environment, they may be hesitant to report the situation when a contract prevents them from transferring to a competing company. Highly trained employees who possess a specific set of skills, like tech workers, are easily taken advantage of under non-compete contracts because there are only a select number of companies that are hiring for their skill set.

Carter Law Firm specializes in protecting employees nationwide and has been successful in cases against some of the largest corporations. When you’re ready to learn your rights, contact us for a free consultation.