Employers take advantage of vulnerable employees by forcing them to sign unnecessary non-compete agreements

Time Magazine recently ran an article that discussed how non-compete agreements particularly hurt lower-wage earners.

Remember the 2014 controversy surrounding Jimmy John’s forcing their sandwich makers to sign non-compete agreements?  That ignited a discussion about the unequal balance of power between employees and employers and particularly between lower-income or lesser educated employees and their employers.

The Time article reports that 14% of employees earning less than $40,000 per year have non-compete agreements.  Additionally, 70% of workers are not told that they must sign the non-compete until after they accept the job. This means employees are accepting offers (and often resigning other employment) before learning that they will be expected to agree to these restrictions which could harm their career trajectory well into the future.  These agreements are often buried within stacks of documents given to employees on the first day of work.  They also tend to contain ridiculous amounts of legalese which means that a lot of employees don’t even understand what they’re reading.  Worse yet, many of these lower paid employees do not have the money to hire a lawyer to interpret the agreement for them.

Lower wage earners who sign these agreements are putting themselves in particular danger because they are oftentimes facing limited job opportunities and earning potential to begin with.

In response to the public’s growing concern over this issue, two Senators proposed a law which would prohibit employers from requiring lower-wage earners to sign non-competes.  This proposed bill would also require employers to notify potential employees of any requirement to enter into a covenant not to compete prior to the start of their employment.

This bill, as most things in Washington, has stalled but hopefully it will see a resurgence after the primary season.