Your non-compete clause is probably illegal (with WA Attorney General Bob Ferguson)

Pitchfork Economics with Nick Hanauer

Civic Ventures

Business, Government, News, Politics

4.8 • 1.5K Ratings

🗓️ 18 May 2021

⏱️ 43 minutes

🔗️ Recording | iTunes | RSS

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Summary

Non-compete clauses, and the lesser-known no-poach agreements between franchises, are shockingly common for low-wage workers. Although these contracts were originally intended to protect trade secrets among high-level executives, they have spiralled into an unfair labor practice that keeps wages low, limits employee mobility, and decreases competition. Washington state Attorney General Bob Ferguson explains how non-competes and no-poach agreements violate the law in many states, what his team did to get hundreds of huge employers across the country to cease and desist, and why you should tell your state’s Attorney General if you know of any low- or middle-income workers who are being forced into signing these agreements. Bob Ferguson is Washington State’s 18th Attorney General. As the state’s chief legal officer, Bob is committed to protecting the people of Washington against powerful interests that don’t play by the rules. Twitter: @BobFergusonAG Show us some love by leaving a rating or a review! RateThisPodcast.com/pitchforkeconomics Why aren’t paychecks growing? A burger-joint clause offers a clue: https://www.nytimes.com/2017/09/27/business/pay-growth-fast-food-hiring.html Workers in Washington state win big under new non-compete law: https://www.emeryreddy.com/2019/09/workers-in-washington-state-win-big-under-new-non-compete-law/ Attorney General Bob Ferguson stops King County coffee shop’s practice requiring baristas to sign unfair non-compete agreements: https://www.atg.wa.gov/news/news-releases/attorney-general-bob-ferguson-stops-king-county-coffee-shop-s-practice-requiring AG Report: Ferguson’s initiative ends no-poach practices nationally at 237 corporate franchise chains: https://www.atg.wa.gov/news/news-releases/ag-report-ferguson-s-initiative-ends-no-poach-practices-nationally-237-corporate Website: http://pitchforkeconomics.com/ Twitter: @PitchforkEcon Instagram: @pitchforkeconomics Nick’s twitter: @NickHanauer

Transcript

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0:00.0	There are a lot of myths around non-compete. People think, well, there's not that many,
0:04.8	and it must be these executives who have all the top secret information about a company
0:08.3	and should not go to a competitor. The reality is very different. 30 million people,
0:12.8	nearly one out of every five workers in the United States, are currently bound by non-compete.
0:17.6	It has just been this fantastic way for companies to steal power, to steal wages from their employees.
0:30.7	From the home offices of civic ventures in downtown Seattle, this is Pitchfork Economics,
0:37.7	with Nick Hanauer, the best place to get the truth about who gets what and why.
0:48.6	I'm Nick Hanauer, founder of Civic Ventures.
0:51.9	I'm David Goldstein, senior fellow at Civic Ventures.
1:00.0	So, Nick, I can't really describe what it is I do for you, but if I wanted to do this for another
1:08.3	really rich guy, I'm perfectly free to do that, right? You are. At any moment. At any time.
1:16.0	Because you never had me sign some non-compete or anything saying that I can't do this thing,
1:22.8	that I can't describe for somebody else who I can't describe.
1:28.8	Yeah, you can go torture someone else anytime you choose, and it will be fine.
1:35.2	And yet, Nick, for millions of low-wage workers, workers earning under $20,000 a year,
1:42.1	they have been forced to sign non-compete to keep them from working for other companies,
1:49.6	particularly it was predominant in the fast food industry and the restaurant industry and
1:54.5	other low-wage sectors. Absolutely stunning. For those listeners who are not familiar with this
2:01.4	practice, a standard non-compete is one and a half to two years, and the company requires you to
2:11.0	sign it upon accepting employment, and it basically prohibits you from doing work similar to the work
2:21.2	that you are presently doing for any other competitor for a year and a half or two years.
2:28.8	And obviously, this is great for the company that forces you to sign the non-compete,
	...

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