When utilized strategically, noncompete agreements can be a valuable tool for employers to protect against unfair competition from former employees. However, in recent years, several states have begun to limit more strictly the use of noncompete agreements, especially when it comes to low-wage workers. Combined with the current White House’s agenda and recent Executive Order 14036, “Promoting Competition in the American Economy,” (the order), the enforceability of noncompete agreements for low-wage workers faces an uncertain future.

Generally speaking, noncompetes are found as stand-alone agreements or as clauses embedded within employment agreements, which prohibit employees from engaging in competition with an employer after leaving their positions. Historically, the enforcement of noncompete agreements has been dictated by state law. States that have taken it upon themselves to curtail the use of noncompetes have primarily done so by limiting the scope of the restrictions imposed and conditions under which such agreements may be executed. But some states have taken even more aggressive steps.

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