--- title: Worker Non-Compete Clauses Are Incredibly Common—and Often Make No Sense description: A new White House report found that nearly 1 in 5 American workers has signed a non-compete agreement. authors: - name: Kerry Close url: https://money.com/author/kerry-close/ at_money_since: 2016 articles: 182 covers: - Career Advice - Banking - Business - Credit Cards - Economy and Politics - Education - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Retirement - Shopping - Taxes - Technology social: - https://x.com/kerryclose former_staff: true published: '2016-05-12T20:18:58.000Z' modified: '2016-05-12T20:18:58.000Z' section: Career Advice tags: - agreement - contract - Employment - job - pubdesk - Workplace word_count: 433 canonical: https://money.com/non-compete-agreements-common/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Jimmy John's is a company that makes workers sign non-compete agreements.](https://img.money.com/2016/05/non-compete-agreements.jpg) *Jimmy John's is a company that makes workers sign non-compete agreements.* If you signed a non-compete agreement before you started your job, you're in good--if annoyed--company. A recent White House [report](https://www.whitehouse.gov/sites/default/files/non-competes_report_final2.pdf) found that 18% of American workers are currently restricted by non-compete clauses. If you've never signed one--or even if you have and had no idea what it was--a non-compete is a legal agreement that prevents an employee from leaving a job at one company and taking a similar one with a competing company, for a specified period of time. Of the workers who have signed non-competes, fewer than half say they had access to trade secrets that a potential rival company could take advantage of. What's more, 37% of workers say they have signed non-compete agreements at some point in their careers. While engineering and computer/mathematical occupations have the highest prevalence of non-competes, the agreements aren't exclusive to highly-skilled professions. For instance, 15% of workers without four-year college degrees are subject to non-competes, while 14% of employees earning less than $40,000 a year have signed a non-compete. That's despite the fact that employees in both sectors are about half as likely to possess trade secrets than more highly educated and higher-earning counterparts in the work force. The driving force behind the popularity of non-compete is likely workers' lack of knowledge about the agreements. A [2012 survey](http://www.nber.org/chapters/c12452.pdf) finds that more than 70% of workers were not told about the non-compete clause in their job offers. Instead, they were asked to sign after they had accepted the offer--and potentially turned down other offers. It also found that very few workers ask about the terms of their non-compete or try to negotiate with their prospective employers. In one of the most puzzling and criticized example of non-competes, fast food sandwich chain [Jimmy John's](http://fortune.com/2015/06/03/non-compete-ban-bill-jimmy-johns/) requires workers to promise they won't work for a competitor, defined as a nearby business that derives at least 10% of its revenue from sandwiches, within two years of leaving their job. Specifically citing Jimmy John's, two senators introduced a bill last summer that would prohibit the use of non-compete agreements for employees earning less than $15 an hour, $31,200 a year or the minimum wage in the employee municipality. It would also require employers to tell prospective hires that they may be asked to enter into such an agreement. [![Best college education image](https://content.money.com/wp-content/themes/money2018/img/college-site-banner-02.png)](https://best-colleges.time.com/money/search-colleges/?xid=cm-mcpFindTheCollegeWidget) Still, there are some sensible explanations for why companies demand employees agree to non-compete clauses. [Some research](http://www.brookings.edu/research/opinions/2016/05/06-leveling-the-playing-field-for-workers-by-reforming-non-competes-nunn) suggests that stronger non-compete enforcement is correlated to more firm-sponsored training. Apparently, firms are more willing to invest in workers when managers believe the employees are unlikely to quit and take their knowledge and experience elsewhere. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/non-compete-agreements-common/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Career Advice", "item": "https://money.com/career-advice/" }, { "@type": "ListItem", "position": 3, "name": "Employment", "item": "https://money.com/employment/" }, { "@type": "ListItem", "position": 4, "name": "Worker Non-Compete Clauses Are Incredibly Common—and Often Make No Sense" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/non-compete-agreements-common/#webpage", "url": "https://money.com/non-compete-agreements-common/", "name": "Worker Non-Compete Clauses Are Incredibly Common—and Often Make No Sense", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2016-05-12T20:18:58.000Z", "mainEntity": { "@id": "https://money.com/non-compete-agreements-common/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/non-compete-agreements-common/#breadcrumb" }, "dateModified": "2016-05-12T20:18:58.000Z" }, { "@type": "Article", "headline": "Worker Non-Compete Clauses Are Incredibly Common—and Often Make No Sense", "articleSection": "Career Advice", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2016/05/non-compete-agreements.jpg", "width": 3000, "height": 2165, "caption": "Non-compete-agreements" } ], "author": [ { "@type": "Person", "name": "Kerry Close", "url": "https://money.com/author/kerry-close/", "@id": "https://money.com/author/kerry-close/#author", "sameAs": [ "https://x.com/kerryclose" ] } ], "publisher": "https://money.com/#organization", "datePublished": "2016-05-12T20:18:58.000Z", "description": "A new White House report found that nearly 1 in 5 American workers has signed a non-compete agreement.", "abstract": "A new White House report found that nearly 1 in 5 American workers has signed a non-compete agreement.", "@id": "https://money.com/non-compete-agreements-common/", "inLanguage": "en-US", "dateModified": "2016-05-12T20:18:58.000Z", "wordCount": 433, "keywords": [ "agreement", "contract", "Employment", "job", "pubdesk", "Workplace" ], "about": [ { "@type": "Thing", "name": "Career counseling", "sameAs": [ "https://en.wikipedia.org/wiki/Career_counseling" ] }, { "@type": "Thing", "name": "Employment", "sameAs": [ "https://en.wikipedia.org/wiki/Employment" ] } ] } ] } ```