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Companies don’t even need to merge in order to pay workers less than they’d have to pay in a truly free labor market. I’d assumed only high-end employees were ever required to sign noncompete contracts—an HBO executive prohibited from going to work at Netflix, a coder at Lyft who can’t take a job coding for Uber. But no: shockingly, noncompetes have come to be used just as much to prevent a $10-an-hour fry cook at Los Pollos Hermanos from quitting to work for $10.75 at Popeyes. Of all American workers making less than $40,000 a year, one in eight are bound by noncompete agreements. As another way to reduce workers’ leverage, three-quarters of fast-food franchise chains have contractually prohibited their restaurant operators from hiring workers away from fellow franchisees.
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