'Money and greed': how non-compete clauses force workers to fight for rights

https://www.theguardian.com/us-news/2018/oct/24/non-compete-clause-low-wage-workers-lawsuits-rights

Jared Bennet of the Center for Public Integrity
Wed 24 Oct 2018 06.00 EDT

Michael Kenny’s 13-day stint at Critical Intervention Services (CIS), a Florida private security company, was short but consequential. The employment contract he signed with CIS in January 2017 has blocked him from working as a security guard in Florida ever since – but Kenny’s contract was hardly unique.

In fact, the countersuits that Kenny and CIS subsequently filed against each other illuminate an argument about workers’ rights that is raging nationwide.

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Traditionally, non-compete clauses were found in contracts for senior employees who might have access to trade secrets or develop personal relationships to clients. Non-compete clauses help protect companies that fear employees will leave and take those assets to a competitor.

But when the recession receded, non-compete clauses started appearing in contracts for workers in low-wage jobs such as sandwich makers. They remain a roadblock for everyone from hair stylists to house cleaners. Their reach is difficult to determine because many workers don’t realize theyhave signed a non-compete clause. And though many courts are reluctant to enforce such agreements, few low-income workers have the resources to legally challenge them.

Full employment, economists predicted, would allow employees to shop around for better pay or working conditions. As workers flexed new bargaining muscle, wages would rise and conditions would improve because employers would face increasing pressure to find and keep talent – or so the theory went.

But though unemployment fell to 3.7% in September, that scenario hasn’t fully played out. One reason, research suggests, is that restrictive contract clauses have limited workers’ mobility and their ability to advocate for higher pay.

As a result, said David Seligman, an attorney and director of Towards Justice, a not-for-profit legal organization that brought cases against fast-food restaurants over anti-competitive hiring practices, “the market for low-wage workers is not free”. Instead, he argues, “there’s all kinds of impediments to worker mobility”.

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