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How Noncompete Agreements Hurt Florida's Economy

Lawmakers in Massachusetts are taking action to make noncompete agreements less restrictive. And, while more states are primed to follow suit, it is unclear whether Florida is one of them.

As detailed on a recent broadcast of PBS NewsHour, Florida ranks among "the more pro-business states," and, to the detriment of individual workers, noncompetes are often enforced by the courts. 

The problem is wide-reaching. Not only are noncompetes harmful to employees, but recent reports have found that they inflict damage on consumers, prevent meaningful progress in the sciences, and harm the economy as a whole.

Protecting businesses, but harming employees

According to an article in the Christian Science Monitor, "Noncompetes have typically been used for employees in the upper echelons of industries that rely on trade secrets, institutional knowledge, and longstanding interpersonal relationships." Yet over time they have become much more commonplace, restricting job prospects for workers across the economy to a degree "beyond what many would consider reasonable." A Treasury Department report revealed that nearly 20 percent of the U.S. workforce is covered by noncompete agreements.

Doctors and medical practitioners tend to be especially hard-hit. If they choose to leave the hospital or medical group for which they work, their noncompete clauses usually prevent them from working within the same region for a number of years. This can, of course, have an adverse effect on patients, who are thus unable to see the medical professionals whom they have come to trust. Many communities lose high-level professionals, who simply move away-often out of state-if they want to continue practicing.

Resolution through legal representation

Companies that require noncompetes argue that these agreements protect their business. Nevertheless, opponents aver that they are little more than an unfair way to retain workers. As such, in recent years, many employees have begun to hire lawyers and argue at trial - with a great deal of success - that they should not be bound by noncompetes.

The Massachusetts bill seeks to find accord between workers who want to move about in the economy and companies seeking to keep their business secrets secret. New Hampshire, Utah, and Hawaii have also moved to ease restrictions on workers. In Florida, however, there is little legislation underway, and the surest means of legal protection is, it seems, to find an effective attorney.

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