Abstract

Noncompete agreements are among the most commonly used methods to restrict employment. Upwards of 38% of American workers, many of which are low-wage workers, have signed noncompete agreements. These agreements effectively hold those workers hostage to their current employer. This project analyzes the use of noncompete clauses in employment contracts with low-wage workers. We show that noncompetes with low-wage workers are not enforceable in the U.S.; employers nevertheless continue to include noncompete clauses in employment contracts with low-wage workers. We survey states’ attempts to regulate the use of (even unenforceable) noncompetes and argue that current legislation is ineffective at preventing employers from including noncompetes in low-wage worker contracts. We argue that employers’ use of (even unenforceable) noncompete agreements with low-wage workers is wrongfully exploitative of those workers, and we provide suggestions for how states can effectively regulate the use of noncompetes, and thus protect low-wage workers from exploitation, using Virginia’s recently passed noncompete bill as a model.