What if employees could choose the terms of their exit? Non-compete clauses are widely used to protect firms’ investments in employee training and confidential information, but they also restrict labour mobility, suppress wages, and may hinder competition. In a recent Concurrences article, RBB's David Henriques
David HenriquesSenior Associate explores an alternative mechanism: allowing employees to opt out of non-compete clauses in exchange for repaying part of their employer-funded training costs.
The article presents a training repayment opt-out model, whereby employees may choose to forgo non-compete clauses in exchange for agreeing to repay part of the employer’s training costs if they leave within a defined period. This mechanism shifts post-employment restrictions from an all-or-nothing lock-in to a flexible arrangement, where employees can choose mobility by paying a clearly defined cost.
From an economic perspective, the model internalises exit-related costs, promotes efficient matching, and mitigates the potential exclusionary effects of non-competes on both rival firms seeking talent and workers seeking mobility. From a legal and policy perspective, it offers a contractually grounded alternative to blanket enforcement bans, aligning with principles of proportionality, transparency, and individual choice. While safeguards are needed to prevent abuse, this more flexible approach to contracts can support competition, innovation, and dynamic labour markets.
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