Why your non-compete clause is probably illegal (with Attorney General Bob Ferguson)

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 spiraled 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.

This episode was originally recorded and released in May 2021.

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

Noncompete agreements have pushed U.S. wages even lower, says a new Biden administration report: https://www.fastcompany.com/90729820/noncompete-agreements-have-pushed-u-s-wages-even-lower-says-a-new-biden-administration-report

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