KKR Is Eliminating Non-Competes for 800,000 Workers Making Under $100,000

While KKR itself only has about five thousand employees, according to reporting from Bloomberg this decision also applies to all of the over 800,000 employees at the hundreds of companies in KKR’s private equity umbrella. This applies to all employees at these companies who make less than $100,000 per year, nullifying any existing non-competes and banning them going forward. 

KKR’s decision comes as good news to the many critics of non-compete agreements, who have attacked these restrictions as both lowering wages and harming competition.

“Non-compete clauses are bad for employees, customers, and the companies that enforce them,” wrote management consultant Peter Cohan in an opinion piece for Inc.

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According to the FTC, almost 30 million Americans, or 18 percent of U.S. workers, are subject to a non-compete agreement. These agreements are usually discussed in the context of executives who might have trade secrets or inside information. For example, an executive at Ford might be under a non-compete that prohibits them from working for another car company in the Detroit area for the next year. 

However, they can also apply to workers with less glamorous jobs. Non-competes have been weaponized in industries as varied as pest control technicians and fast-food workers at sandwich chain Jimmy John’s. One survey by the Economic Policy Institute found that about 29 percent of workplaces with an average wage of less than $13.00 an hour have non-compete requirements. 

Pete Stavros, KKR’s co-head of global private equity, said in an interview with Bloomberg that this topic came on his radar while appraising a company and realizing that its dog groomers were under non-compete agreements. Stavros says he then came to learn that this was a fairly common restriction that impacted low and middle income employees of KKR portfolio companies across the country.