Non-Competes: Not Just for Executives Anymore
Non-compete agreements are provisions that are traditionally included in the contracts of executives and tech employees who work with sensitive trade secrets. These agreements prevent these high-level, and usually well-compensated, employees from immediately going into competition with their employer should they leave the company. While these agreements stifle competition, there are arguments that they make sense for these positions. However, companies like Amazon have made non-compete agreements a condition of employment for even temporary factory workers. If these oppressive agreements are enforceable they could prevent temporary factory or warehouse workers from finding other work basically anywhere once their temporary job has ended.
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Amazon’s Draconian Non-Compete Agreements
The Verge recently obtained a copy of one of Amazon’s non-compete agreements that the company required temporary workers to sign. The agreement states that both during employment and for a full year and a half after these temporary employees leave Amazon, the employee will not directly or indirectly “engage in or support the development, manufacture, marketing, or sale of any product or service that competes or is intended to compete with any product or service sold, offered, or otherwise provided by Amazon … that employee worked on or supported.”
Consider this though: Amazon sells almost everything. It sells books, clothing, kitty litter, bread machines, outdoor grills, paints, computers, and auto parts, as well as thousands of other types of goods. Therefore, if an employee who worked in one of Amazon’s warehouses were held to this agreement, they could be prevented from working in essentially any industry for really no valid reason other than Amazon has the power to do so.
In the past, Amazon even forced laid-off employees to reaffirm their commitment to the non-compete agreement as a condition of receiving any severance package.
Public Outcry Leads to Amazon Reversing Course
The Guardian reports that Amazon has now reversed course on its non-compete agreements for temporary workers. The company is removing the clause from its contracts for hourly workers after facing harsh public criticism.
While this one company has, after facing public scrutiny, done the right thing, the fact that it ever used the non-compete clause to begin with should be deeply troubling to the average American worker. If companies like Amazon are willing to try to use these oppressive clauses against low-wage, temporary workers, then other companies may also be willing to try to expand the use of these clauses.
The enforceability of such clauses really depends upon where you live. Different states have different laws regarding these clauses, and some states only allow them to be used in contracts for certain types of employees. However, other states do not have laws that are as protective of employee rights. So if your boss tries to get you to sign one of these agreements, you will want to speak with an employment attorney to make sure you are not preventing yourself from finding another job if this one does not work out.
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Dan Kalish is a partner and founder of HKM Employment Lawyers (www.hkm.com), an employment law firm that represents individuals nationwide. A graduate of Harvard College and Yale Law School, Dan frequently speaks and writes about issues related to employment law on hkm.com/employmentblog.