Times Union - Commentary: Noncompete Clauses Hurt Workers and the Economy

Chief economist Brian Callaci shares an opinion piece on the scaremongering tactics attempting to deter the legislation of banning of non-compete clauses in New York.

Recently, the Business Council of New York State’s think tank arm, the Public Policy Institute, blanketed New York with seven figures’ worth of ads attacking legislation to ban noncompete clauses in labor contracts. These clauses prevent workers from changing jobs to work for the employer of their choice or to start their own business, trapping them in their current jobs. 

These scaremongering ads are a last-ditch effort to undermine legislation, S.3100/A.1278, already passed by the Assembly and Senate, which would ban noncompete clauses in New York. The bill is currently awaiting Gov. Kathy Hochul’s signature. 

The attack ads allege that the ban will “crippl[e] businesses’ ability to fuel innovation and retain talent” and risks “seeing our jobs flee to other states.” But in fact, economists largely agree that the opposite is true. Research shows that noncompete clauses harm New York’s workers and their communities, reduce entrepreneurship and innovation, slow job growth and hurt New York’s economy overall.

Evidence is overwhelming that by limiting worker mobility, noncompete clauses drive down wages, reduce the formation of new businesses and trap workers in jobs where they may be subject to unsafe working conditions, discrimination and abuse. The U.S. Federal Trade Commission, which has proposed a similar ban, estimates that noncompetes cost workers up to $296 billion per year.

Read full article here

---