Monthly Archives: May 2017

How Noncompete Clauses Keep Workers Locked In

istock_000004809289xsmallThis New York Times article, How Noncompete Clauses Keep Workers Locked In, is just the most recent example of the national attention non-compete clauses are now capturing. The article examines the potential devasting impacts of non-compete clauses and the lawsuits filed to enforce them. Employees everywhere should read the article, but here a couple of quotes that highlight the importance of these issues:

“By giving companies huge power to dictate where and for whom their employees can work next, noncompetes take a person’s greatest professional assets — years of hard work and earned skills — and turn them into a liability.”

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“But the move to tie workers down with noncompete agreements falls in line with the decades-long trend in which their mobility and bargaining power has steadily declined, and with it their share of company earnings.”

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“It’s one thing to have a bump in the road and be in between jobs for a little while; it’s another thing to be prevented from doing the only thing you know how to do.”

– Max Burton Wahrhaftig, an arborist in Doylestown, Pa.

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Requiring a non-compete reveals much about an employer’s human resources philosophy; the right work is subordinated to an employer’s desire to protect itself from competition — in a free market economy no less.  In too many instances, a non-compete requirement reflects an abuse of the disparity in bargaining power.  It can signal an ideology that employers are sovereign and employees are the property of the employer, even after they are fired (without cause).  And even where the employer has legitimate concerns and interests at stake, the non-competes clauses are usually overbroad and unfair.

However, from the employee perspective, signing a non-compete can reflect a mindset that focuses on short-term gain while ignoring long-term risks. Employees who act like serfs will be treated as serfs.  There is no doubt that an employee has a little choice when s/he is presented with the choice between signing or losing her/his job. But, those employees who have choices and bargaining power should exercise it in furtherance of the right to work.  So, read the NY Times article and beware.