Non-compete agreements were originally intended to prevent high-level executives from taking trade secrets and client relationships to a competitor, but companies have recently been expanding their use of non-compete agreements to almost all their employment contracts, even with workers earning minimum wage. It has become a way to lock low-wage employees into their current jobs because the terms of their non-compete contract often make it impossible for them to find work in a related field.
At the same time, while non-compete agreements might not do much harm to employees at the executive level because they have more bargaining power, workers at the lower levels often have little-to-no bargaining power and are often unaware of their options when it comes to their employment contracts. Whether that means negotiating the terms of their contract, or recognizing when the contract is invalid, low-wage workers tend to have fewer options than those higher up the ladder.
While there is no federal law putting limitations on when companies can use non-compete agreements, there are a variety of state laws that either ban or limit non-compete agreements within the state. California is famous for their total ban on non-compete agreements, while other states, like Washington, have recently added limitations to when companies can use non-compete clauses and what terms can be included in those contracts. Continue reading ›