It would raise wages for low-income workers while letting employers choose who to hire
American workers generally have little job security. As a general rule, employers can fire non-union workers for any reason, a legal doctrine known as “employment at will.”
Incredibly, in the last decade or so, employers have eroded job security below even this abysmal standard, by forcing millions of hourly workers to sign “non-competes” that prevent them from leaving jobs for a better opportunity. Now many employers are loudly opposing a federal effort to curtail this abuse of employer power.
The Federal Trade Commission has proposed a broad ban on the use of non-compete clauses. Non-competes prevent workers from moving to another employer in the same or related fields for an extended period of time after a job ends – if they try it, they can be forced to quit the new job and/or pay heavy financial penalties.
Thus, workers are either stuck in their current jobs, which may have poor pay and working conditions that are difficult to change, or they have to start over, at the bottom of the wage scale, in a different field.
As a legal aid attorney with Community Legal Services (CLS) in Philadelphia where I have represented low-wage workers for 16 years, I have seen the growing need to ban the use of non-competes.
I have worked with many clients such as Ms. Reed, who had been a part-time janitor making $10/hour for a cleaning contractor. When her contract ran out, a Catholic school she had been cleaning at hired her full time.
However, she was quickly fired when the school received a litigation threat from the contractor over a non-compete clause she didn’t even remember existed. In this case, the clause was legally unenforceable – but the school told me it didn’t matter, because they couldn’t afford litigation when it was much less costly to simply hire someone else.
Non-competes were originally intended to affect high-income jobs where workers can bargain for higher salaries in exchange for limitations on their future opportunities. However, employers have considerably expanded their use of non-competes to cover many low-wage workers like Ms. Reed.
Today, at least 18% of U.S. workers are subject to non-competes, and almost 30 percent of non-competes cover workers making below $13 per hour. Read more