RESTRICTIONS ON WORKER MOBILITY AND THE NEED FOR STRONGER POLICIES ON ANTICOMPETITIVE EMPLOYMENT CONTRACT PROVISIONS

By Donald J. Polden¹

I. INTRODUCTION

There is increasing concern in the United States about the difficulties that American workers are facing including concerns about limits on worker job mobility and how those limits affect workers’ wages and compensation, employee benefits, and finding their next job.² Workers believe the challenges they face in changing jobs for better salary and benefits should be addressed so they have greater job mobility and opportunities for advancement. Workers are subject to restraints on job mobility across the spectrum of jobs, including those in executive-level positions as well as minimum-wage employees. Workers complain that they are not constrained in getting better jobs by their experience, training, or education but rather by their employers’ policies and employment practices, especially their growing use of employment contracts with restrictive practices that limit workers’ abilities to seek better work.³

This Article argues that California too should re-examine its laws concerning restrictive provisions in employment contracts and arrangements for their impacts on labor markets, job mobility, and wages. California is perhaps the most restrictive of states in prohibiting the enforcement of employer restraints such as non-competes. While current California statutory policy on non-compete provisions is seemingly clear, there is evidence that it is being evaded by employers who impose the noncompetition restrictions, even if unenforceable. California employers further restrain worker mobility through imposition of other restrictive provisions—such as no-shop clauses, no-hire provisions, confidentiality provisions—that are not explicitly covered by California’s statutory policy against restraints on mobility but nonetheless are widely used to hamper worker mobility.⁴