A 2019 study by the Economic Policy Institutefound that roughly half of private-sector businesses make workers sign non-competes. That translates to tens of millions of workers who are contractually prohibited from going to work for a rival company once they leave their current company. Critics say these agreements have been overused--keeping lower wage workers in fields such as fast-food, hairdressing, and house cleaning from earning a living. Critics further argue non-competes keep all wages low.
State Sen. Julie Kushner (D-Danbury) is sponsoring a bill (SB 906) to ban non-competes for many workers across Connecticut. Senator Kushner joined "All Things Considered" to talk about why she thinks non-compete agreements are harmful:
“We've heard horror stories where workers were already on the job, and they were told if you don't sign this non-compete, you'll lose your job. So, it's not just about new workers coming in, signing a whole stack of papers and not knowing really the full content of those papers. But it's also about workers who are in the job.”
Senator Kushner said her anti-noncompete bill does not cover exempt workers on the higher end of the income scale. Instead, she pointed to an example of a man she spoke with who was asked to sign a non-compete prohibiting him from doing contracting work in Fairfield County for several years. She said he earned roughly $38,000 in wages with that employer, and that it would have cost him nearly that amount to fight the non-compete's validity in court to be free to run his own individual contracting business years later.
"It was like a year's worth of wages in trying to fight that non compete," Kushner said. "So, I think there has been tremendous abuse of this." Senator Kushner says the bill is geared toward employees who are non-exempt employees--people earning a weekly an hourly wage."
She said the bill is geared toward employees who are non-exempt employees--people who are earning a weekly an hourly wage, like the contractor.
"It also is geared towards those who earn less than three times the minimum wage. So, there are some parameters that we put into this bill so that we make sure that we are looking at professions that there's no claim that one could make that they're in possession of proprietary secrets.”
Kushner indicated she mostly does not buy concerns voiced by supporters of non-competes who say companies should be protected against employees leaving the company and taking proprietary secrets with them to a competitor.
“If we're talking about being in possession of, you know, what one would consider, like intellectual property for a company, that's a very different situation and it's very unlikely that a worker who is earning 3 times the minimum wage would have access to that kind of information,” she explained.
There is also activity on the federal level to limit non-compete agreements. That includes a measure sponsored by Connecticut U.S. Senator Chris Murphy. Senator Kushner talked about why action on the state level is necessary, given this action on the federal level:
“I was very pleased to see Senator Murphy raised this issue and put forward the bill. But, I think we all know that it takes the federal government a much longer time to get things done, particularly in the current climate.”
Senator Kushner added “I'm very happy that Connecticut likes to take the lead when it comes to protecting workers here in Connecticut.”
