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Non-compete deals hamstring job market, says union

According to a report by white-collar union federation Akava, an increasing number of experts and executives have a non-compete clause in their contracts. Akava says this makes it unnecessarily hard for employees to switch jobs. Industrial employers lobbyist EK says the clauses are necessary.

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A boom in non-compete agreements is causing trouble, says Akava. Image: Kai Pfaffenbach / EPA

Employers are needlessly hampering the labour market by including more and more non-compete clauses in employees' work contracts, according to a fresh report by white-collar union federation Akava.

The report comes on the heels of a similar employment announcement by the Confederation of Finnish Industries (EK), which indicates that some companies face recruitment problems following an upturn in industry business cycles.

The Akava report collected information from more than 2,000 federation members and found that increasingly many employees are finding it difficult to switch jobs due to the non-compete agreements.

"Based on the report we can see that non-compete agreements have become more common extremely quickly," says Akava lawyer Vesa Vuorenkoski. "Since 2000, the number of such agreements has tripled. At present every third company employee with an Akava membership has signed a non-compete agreement."

The report also points out that lower-level specialist positions are also being affected by the growing non-compete trend, not just bosses.

"Companies of all sizes use these clauses, but in the retail sector the proportion is largest, with almost half of companies insisting on the agreement," notes Vuorenkoski.

EK: Restrictions necessary

The Confederation of Finnish Industries admits that non-compete agreements increase rigidity in the job market. Employers still insist on using them.

"Certainly all kinds of restrictions affect flexibility, but so do clauses on protection against dismissal and termination notice periods," says EK legal chief Markus Äimälä. "We need restrictions such as these."

Akava suggests that this claim on the necessity of non-compete agreements should at least be discussed.

"We certainly hope that we can get into talks on whether this sort of inflexibility in the market is desirable," Vuorenkoski says. "It is causing recruitment issues for companies as well as making life harder for employees switching jobs. We'd like to determine whether this is really necessary."

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