US: Dems take on non-compete contracts

US Senator Chris Murphy (Democrat – Connecticut) and two other Senate Democrats, Elizabeth Warren (Democrat – Massachusetts) and Ron Wyden (Democrat – Oregon) unveiled legislation that would prohibit employers from locking workers into noncompete agreements and put violators on the hook for federal fines or private lawsuits.

Non-compete agreements result in lower wages and diminished entrepreneurship as workers have little leverage to negotiate with their employer, leave for a better opportunity, or start a small business. Research shows that nearly 40%

of American workers have been constrained by non-compete agreements at some point in their careers, and that they are common even among low-wage workers. Many believe that California’s ban on non-compete agreements has been a prime factor in the state’s innovative and growing economy.

“Non-competes rig the system against hard working people,” said Warren. “These clauses reduce worker bargaining power, stifle competition and innovation, and hurt Americans striving for better opportunities. I’m glad to join Senator Murphy to put an end to these anti-worker, anti-market agreements.”

“Too many companies try to hide arbitrary non-compete agreements in contracts. This rigged system does nothing but hurt workers and stifle growth. People in Connecticut want to be able to change jobs and get better wages. Whether you’re a fast food worker or a tech entrepreneur, no worker should unfairly be at the mercy of their employers,” said Murphy.

“In order to climb up the economic ladder, workers need to be able to seek higher wages either from their current employer or a new one. Yet that’s exactly what companies are preventing by forcing employees to sign non-compete clauses to get a job in the first place,” Wyden said. “It’s time to put the power back into the hands of working Americans and free them up to go after higher-paying jobs using the experience they’ve gained, rather than allow companies to keep workers stuck in jobs that are no longer providing a competitive wage.”

Full Content: Elizabeth Warren

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