Open Source: Broad noncompete agreements divide North Carolina

Brian Gordon
·5 min read

I’m Brian Gordon, tech reporter for The News & Observer, and this is Open Source, a weekly newsletter on business, labor and technology in North Carolina.

For months, the Federal Trade Commission has asked the public to share thoughts on the agency’s proposal to ban noncompete agreements from workers’ contracts. People submitted thousands of comments, all of which can be read here.

The potential ban has proven controversial, nationwide and in North Carolina. Business advocacy groups like the NC Chamber say it is misguided and a legal overreach. Others strongly agree with the FTC, arguing noncompetes suppress workers’ wages and competition by unfairly limiting people’s ability to find new jobs.

The agreements are prevalent in health care, tech, manufacturing ... everywhere.

“I’m glad that a lot of these noncompete issues are coming to light because they really do severely limit our ability to move around,” one UNC Health physician in Cary said. “We don’t have any proprietary information. We’re just workers, physicians for the most part, so I think it’s kind of silly.”

Multiple employment lawyers told me most of their clients weren’t aware they had noncompete restrictions in their contracts.

These restrictions can be expansive in scope. In Western North Carolina, for example, Harrah’s Cherokee Casino Resort limits departing employees from working for any competitors within 600 miles of the casino. For context, Raleigh is about 300 miles away.

Other clauses by North Carolina employers limit workers from joining competing firms anywhere in North America — or in the entire world for a period after their employment ends. However, these geographically broad limitations don’t always hold up in North Carolina court.

Bandwidth is one of several Triangle businesses, along with Wolfspeed, IQVIA, UNC Health and Prometheus Group, that uses noncompete agreements to limit where employees can work for a period of time when they leave the company. The Federal Trade Commission is considering banning noncompete agreements in all workplaces. Bandwidth declined to comment.
Bandwidth is one of several Triangle businesses, along with Wolfspeed, IQVIA, UNC Health and Prometheus Group, that uses noncompete agreements to limit where employees can work for a period of time when they leave the company. The Federal Trade Commission is considering banning noncompete agreements in all workplaces. Bandwidth declined to comment.

Wolfspeed fined for fatal accident, parents “satisfied” with citations

Last week, the North Carolina Department of Labor released its initial findings into the Oct. 13 accident at the semiconductor chip manufacturer Wolfspeed that killed a 45-year-old Durham native named Vincent Farrell.

The department cited Wolfspeed with two serious violations that carry a combined penalty of $27,554. Under state law, the maximum penalty for a serious violation is $14,502. “The penalties are in no way designed to make up for loss of life,” NCDOL spokesperson Erin Wilson said in a statement.

Farrell’s parents have reviewed the citations and the initial investigation into their son’s electrocution. Bryant Farrell, Vince’s father, said they were “satisfied” after seeing the violations.

Wolfspeed will now decide whether to pay the fine, appeal the findings or request an informal conference with the state.

“We are currently engaging with NCDOL’s OSH division to discuss the citation(s) issued, and we expect those conversations to continue over the next several weeks,” Wolfspeed spokesperson Melinda Walker told The News & Observer.

Patricia Farrell of Durham holds up memorial plaque of her late son, Vincent, who died while at work at Wolfspeed.
Patricia Farrell of Durham holds up memorial plaque of her late son, Vincent, who died while at work at Wolfspeed.

Fewer tech jobs for the taking

Open tech jobs are becoming more difficult to find, in North Carolina and the Triangle specifically.

Between March 2022 and March 2023, IT job postings fell by half, according to the industry group North Carolina Technology Association.

“It’s a bit of a shock to see the March IT job postings at half the March 2022 level,” said NC Tech’s Andrea Fleming in a statement. “But it’s important to note first that 2022 was a record-setting year for IT job postings.”

There are still thousands of jobs available. In the Triangle, there were 6,767 available tech jobs in March, down from 14,189 openings in March 2022:

IT Jobs by month in Triangle
IT Jobs by month in Triangle

Short Stuff: Indian ambassador in town, Stein sues Google, REI seeks union

  • The Indian Ambassador to the United States was in the Triangle on Thursday, attending the US-India Business Connection event in Morrisville. The governor also stopped by to make remarks. Morrisville is home to a rich Indian-American community, which comprises about a third of the town’s population.

“Not only are Indian-Americans one of the fastest emerging demographics of small business owners in this region, these business owners are bringing diversity and inclusion as well as growth in manufacturing jobs, innovation and investment,” Morrisville council member Steve Rao told The News & Observer.

  • This week, VinFast shipped its second batch of electric vehicles to North America, and on Wednesday, Gov. Cooper was in Lee County to promote the state’s workforce partnership with the Vietnamese automaker that is building its first U.S. assembly plant in North Carolina. Cooper test drove a VinFast SUV model.

  • IBM posted quarterly earnings this week, and Raleigh’s Red Hat (which IBM owns) grew its revenue by 11%.

  • N.C. Attorney General (and gubernatorial candidate) Josh Stein is part of a coalition of state AGs suing Google for allegedly maintaining a digital advertising monopoly.

  • REI workers in Durham filed to unionize last week. If successful, the 37-person staff would be represented by United Food and Commercial Workers. It’s the second Durham workforce to file to unionize this year, after Duke Ph.D. students.

National Tech Happenings:

Apple opened its first retail store in India. CEO Tim Cook was in Mumbai to mark the occasion. The tech giant has struggled to gain traction in the world’s second-most populous country.

Sticking with India… If artificial intelligence replaces workers (a so-called “AI jobpocalypse”) no country will be more impacted than India, which is home to an estimated 5 million coders, writes Bloomberg.

The Montana legislature is the first state to pass a ban on personal-use TikTok. The social media company suggested it would challenge the bill in court if it becomes law. Others are doubtful a state ban will be effective.

Thanks for reading!

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