History of Noncompetition Agreement

20.6.2022

Noncompetition agreements have been a part of employment contracts for centuries, dating back to the Middle Ages. The first recorded noncompete clause was in the year 1414, when a German cobbler prohibited his apprentice from starting his own shoe-making business in the same city.

In the United States, noncompete agreements became more prevalent in the 19th century. Railroads used them to prevent employees from leaving to work for competitors, and manufacturing companies used them to protect their trade secrets.

The concept of noncompete agreements grew in popularity throughout the 20th century, particularly in the tech industry. During the 1980s and 1990s, Silicon Valley companies started adding noncompete clauses to their contracts to prevent employees from jumping ship to rivals.

However, in recent years, there has been a growing backlash against noncompete agreements. Critics argue that they stifle innovation, limit job mobility, and unfairly restrict employees` ability to earn a living. Some states, such as California, have even gone as far as to ban noncompete agreements altogether, with a few exceptions.

Despite the controversy, noncompete agreements remain a common practice in many industries. And as technology continues to advance, it`s likely that the debate over their usefulness and fairness will continue to evolve as well.