A Robert Samuelson piece in the Washington Post on the mismatch between the skills of job seekers and the requirements for open positions may seem like an unlikely place to find an angle on non-compete restrictions. However, in his column on the unemployment rate, Samuelson makes an argument that touches on the role that non-competes can play for employers and employees. In explaining why many individuals who are currently unemployed have struggled to find jobs despite the fact that a number of employers have listed openings, Samuelson theorizes as to why many companies have not responded to the situation by increasing training for new employees:
Companies traditionally provided much training, but that may also have changed. Loyalties have weakened. Companies are more willing to fire; workers are more willing to jump ship. Training may seem a poor investment because workers won’t stay long enough to earn a return. In the McKinsey [Global Institute] survey, companies denied cutting training budgets. But [Georgetown’s Anthony] Carnevale and others think the training has altered. Before, firms provided more basic training in business or technology skills; now, firms expect workers to come with these skills and focus training on firm-specific practices and systems.
In a nutshell, Samuelson’s argument is that a fluid job market acts as a disincentive for employers to train new employees on the general skills required for a position. Rather, they are looking for employees who have the general skills already.
If this analysis is correct, then one potential response by employers to the situation would be greater use of restrictive covenants because such covenants are an important tool for employers to protect their investment in training. An employer is more likely to spend time and money to train an employee if it knows that the employee is likely to stay for a significant period of time. A non-compete restriction acts as an incentive for an employee to stay. Moreover, the law in many states recognizes the linkage between training and non-compete provisions in that a significant expenditure in training can be a legitimate interest to support the enforcement of such a covenant. In short, if an issue in the job market is a concern that money spent on training will be wasted, then use of non-compete provisions can be a solution.