On April 17, the Economic Innovation Group (EIG) hosted a webinar to discuss the harmful economic effects of non-compete agreements and federal efforts underway to reform their widespread use across the labor market.
To begin the webinar, John Lettieri, President and CEO of EIG, spoke with Senators Chris Murphy (D-CT) and Todd Young (R-IN) in a pre-recorded discussion about the Workforce Mobility Act—recently reintroduced bipartisan, bicameral legislation to limit the use of non-compete agreements that negatively impact American workers. Senator Young discussed the need for non-compete reform to support businesses and increase worker mobility and wage growth, and Senator Murphy explained how a ban on non-compete agreements across all income levels can help restore economic dynamism and ensure a prosperous American economy.
Heather Long, Columnist and Editorial Board Member of The Washington Post, then guided a discussion with panelists Evan Starr, Professor at University of Maryland, Peter Gassner, CEO of Veeva Systems, and Steve Cox, President of Steam Logistics about the adverse impacts that non-compete agreements have on worker mobility, American innovation, and economic dynamism.
During the panel discussion, researcher Evan Starr provided an overview of state efforts to curtail the use of non-compete agreements, including recently passed legislation in Illinois, Maryland, New Hampshire, and Washington, D.C., to ban non-competes for lower-wage workers. Starr shared the results from his latest research looking at the earnings threshold for Washington state’s 2020 non-competes law, which covers 80 percent of workers and sets the threshold at approximately $100,000 per year. His study found no evidence that non-compete agreements add value to firms in manufacturing and professional technological services.
Veeva Systems CEO Peter Gassner discussed the impacts of non-competes in the tech industry, and reinforced the need for federal action on non-compete reform to level the playing field for companies and workers across the globe. Veeva Systems employs workers in 40 countries, yet Gassner said Veeva faces difficulty hiring employees in the US due to the pervasive use of non-compete agreements hindering worker mobility and opportunity. Steam Logistics President Steve Cox highlighted the harmful impact of non-competes in the logistics industry, and explained how the pervasive use of such agreements results in wage suppression and talent loss throughout the sector.
Resources Discussed
- The Workforce Mobility Act of 2023
- From the panelists
- Ban Non-Competes to Advance Employee Freedom, Innovation, and the Economy – Peter Gassner
- End Non-Competes – Steve Cox and Steam Logistics
- Evan Starr’s website
Visit EIG’s non-compete reform webpage for additional information including testimonies and commentary, analyses, and our latest research.
