Non-Compete Agreements For Low-Wage Workers
Businesses must deal with competition on a daily basis. Obviously, they like having less competition from former employees. As such, many business require their employees enter into non-compete agreements as a condition of their employment. These agreements (if reasonable) can be very beneficial for businesses. However, when the agreements are unreasonable (as is often the case when involving low-wage workers, the agreements can wrongfully stifle competition.
In the past, these in-demand employees would often jump ship and go to work for competitors in search of greener pastures. This would cause issues in terms of the sharing of trade secrets and other company-specific information, making it so the competitor would now have the upper hand.
To prevent this, employers would ask executives and other high-paid employees to sign non-compete agreements. These agreements are legal contracts that prevent employees from working for competitors. They also prohibit employees from starting their own companies and becoming competitors themselves.
Nowadays, even entry-level employees are being forced to sign these legal documents. Fast food workers, retail workers, hair salon workers, warehouse workers, and janitors are being asked to sign over their autonomy in exchange for employment. This limits their employment opportunities, making them unable to work for competitors in the area.
On top of that, non-competes have become extremely restrictive. For example, some have geographic ranges of 100 miles or more and time periods of two years or longer. So in order for a worker to gain employment elsewhere, they may have to move or change careers. If they don’t follow the terms of their noncompetes, they could end up in court facing hefty fines. It is important for both businesses and workers to understand the when a noncompete agreement is appropriate and to ensure that it complies with Section 542.335, Florida Statutes and applicable case law.
When these legal documents are used on employees who have no access to trade secrets or less than a college education, these employees become stuck. They cannot move forward. They stay with a company they no longer want to work for, decreasing employee morale and creating a hostile work environment.
It also lowers wages for certain groups of workers. Employees often get raises when they change jobs. When they are no longer allowed to do so, it hurts economic growth. In fact, noncompetes cost workers close to $300 billion a year in lost income.
The Federal Trade Commission (FTC) is working to ban non-compete agreements in the United States. For the time being, they are legally enforceable in Florida. They are deemed valid as long as all legal requirements are met. However, they are scrutinized and looked at with some general skepticism.
Contact a Business Litigation Lawyer Today
Non-compete agreements were originally designed for highly paid executives and for employees with specialized training and experience. Entry-level workers who are paid minimum wage should not be forced to sign these documents and limit their opportunities for employment.
Whether you are a company or employee who needs help with non-compete agreements or other business matters, Bradenton business litigation lawyer from Cahall Law Firm can assist you. We’ll help you make sound business decisions. Call (941) 281-2019 or fill out the online form to schedule a free consultation.
Source:
businessinsider.com/noncompete-clauses-ban-low-wage-workers-equity-fair-ftc-2023-1
