Recent Trends in Noncompete Laws Across the United States

Companies often require their employees to sign restrictive covenant agreements that include noncompete, nonsolicitation, and confidentiality clauses. A noncompete prohibits a former employee from working for a competitor, while a nonsolicit typically prohibits a former employee from soliciting customers and employees. Relying on survey data, the Obama administration estimated that about 18 percent of American workers are covered by a noncompete agreement, about 37 percent of American workers have worked under such an agreement at some point in their careers, and about 14 percent of American workers making less than $40,000 a year are subject to a noncompete. Until recently, the fast food company Jimmy John’s included a noncompete clause in its agreements with its employees, prohibiting its sandwich makers from working for a competitor located within two miles of a Jimmy John’s for two years.