Another Voice: Noncompete agreements hurt the business environment and the overall economy (The Buffalo News)

In June, the New York State Legislature passed a bill that would prevent employers from using noncompete agreements to dictate where their employees can work in the future.

Noncompetes cause harm across the entire economic landscape. They lead to suppressed wages, reinforce glass ceilings, and force workers and entrepreneurs out of New York. Many economists will tell you that banning them would be a boon to workers, small businesses and the economy as a whole.

A noncompete ban would also help New York continue to grow as a rising leader in the tech sector. Economists credit California’s 1800s-era noncompete ban for Silicon Valley’s rise as the innovation capital of the world. When a California tech worker has a great idea for a new company, there’s nothing stopping them from starting their own business. Here in New York, that worker likely faces a lengthy court battle with their employer and difficulty finding qualified employees who aren’t restricted by their own noncompete agreements. This stifles innovation and drives startups out of state.

All of the facts support banning noncompetes. That’s why the people who want to maintain the status quo are resorting to scare tactics.

First, you have the mega-corporations who privately tell legislators that they couldn’t possibly turn a profit in New York without a stranglehold on their employees. I’ve routinely asked them, “Hey, don’t you do business in California?” Their silence in response speaks volumes.

Then, you have the public fear mongering. In October, a dark money group spent a million dollars on TV ads that claimed banning noncompetes would shatter our economy – without a shred of evidence.

This month, an Another Voice column (Dec. 3) attempted to make the case that this change to help American workers would somehow actually end up helping Chinese companies.

A shattered economy? China stealing our jobs? It sounds scary, but none of it holds up to scrutiny.

This is the same playbook we see every time the status quo is challenged and Wall Street corporations see an advantage they have over small businesses threatened.

When an employee isn’t allowed to take another job in their field, their employer doesn’t have to work to retain them. Noncompetes help big corporations depress their workers’ wages, thin out the labor market for their competitors and prevent new companies from being established.

Competition is the hallmark of a free market, and job mobility is how most American workers increase their wages. Why in the world should your employer be able to dictate what you can do when you’re done working for them?