Australia’s productivity and wage growth slowdown over the past 15 years has been characterised by a decline in job mobility and firm entry. A recent survey of workers by the e61 Institute suggested that the proliferation of non-compete clauses – where an employee agrees not to compete with their employer after their job ends – could have contributed to this decline.

This note presents five new facts based on a new, high-quality firm-side survey to help policy-makers better understand the prevalence, use and economic consequences of non-competes and other post-employment constraints in the Australian economy.

The first two facts highlight the economic relevance of restraint clauses. The next two facts relate to how firms deploy restraints, which has implications for productivity and worker bargaining power. The final fact provides preliminary evidence on the consequences of restraint clauses.