KKR & Co. has removed non-compete restrictions for lower-paid employees across its US portfolio. Pete Stavros, the executive who co-leads global private equity at the firm, said that workers making under $100,000 a year are no longer subject to those clauses. The firm won't enforce old non-competes for those employees and will not roll out new ones, and it will neither pursue legacy agreements against those workers nor issue fresh ones, and the plan is to broaden the policy over time to cover people making more than $100,000. The change was locked in last year.
Non-competes typically keep departing employees from joining a rival or launching a competing business for a period of time. They are common for top executives in sectors like finance and tech, but, as Stavros noted, have spread into more junior ranks. "Economists would say non-competes can suppress wages," he said.
The move comes after the Federal Trade Commission's 2024 effort to establish a nationwide ban on non-competes for all workers, a rule the US Chamber of Commerce successfully sued to stop. Stavros said KKR has "a weird kind of moral leverage" to act here, since private equity is often seen as the "hard edge of capitalism." He hopes KKR's results show companies can run effectively without non-competes for lower-paid employees and help shape the broader policy debate. KKR manages nearly $800 billion in assets.
When a large employer drops non-competes voluntarily, policy is shifting. Market Briefs covers that change free every weekday.
This forms part of a wider effort to improve engagement, retention, and well-being across KKR-controlled businesses, which together have a workforce exceeding 800,000. Consistent with that, Stavros said KKR would be reluctant to buy businesses where making money for investors would depend on widespread layoffs.
Over 90 portfolio companies take part in an employee ownership program that allows non-executive staff to share in proceeds when KKR exits a company. Beginning in 2011, 40,000 employees have collected over $2 billion in cash from those ownership stakes. Stavros also launched Ownership Works, a nonprofit that promotes the adoption of employee equity by companies. And KKR partnered with Stanford professor Jamil Zaki on research aimed at fostering greater empathy within its partner ranks and among the CEOs leading its portfolio firms.
Stavros said he first ran into the issue while evaluating a pet retailer and discovering its dog groomers were under non-competes. A bipartisan group, the Economic Innovation Group, later documented how common these contracts are. Subsequently, the bipartisan Economic Innovation Group showed how prevalent the agreements were across many industries, spurring KKR's private equity team to examine how they were being used throughout its portfolio.
They found the clauses were broadly applied to lower-level staff at companies the firm had bought. In 2024, the firm told CEOs of its portfolio companies to check with KKR prior to moving to enforce any non-compete.
KKR helped pioneer the leveraged buyout; its 1989 purchase of RJR Nabisco was chronicled in Barbarians at the Gate, and private equity has long been criticized for layoffs and aggressive cost cutting after acquisitions. If a firm that large can run without non-competes for lower-paid roles while expanding employee ownership, expect others to watch closely. For your wallet, the takeaway is simple: how major employers handle mobility and equity can shape where productivity gains and payouts ultimately land.
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