Senators want study of 'non-compete' deals in low-wage jobs

Washington D.C., Mar 7, 2019 / 15:30 pm

A bipartisan group of senators have written to the Government Accountability Office asking it to examine the use of non-compete agreements by employers when dealing with low-wage workers.

 

In a letter sent March 7,  Sens. Marco Rubio (R-FL), Tim Kaine (D-VA), Chris Murphy (D-CT), Elizabeth Warren (D-MA), Ron Wyden (D-OR), and Todd Young (R-IN) asked GAO comptroller general Gene Dodaro to review the practice non-compete agreements, and the effect these agreements have on the economy.

 

A non-compete agreement prevents or delays an employee from taking a new job either with certain competitors or in the same industry after his employment has ended. They are common in some fields as a measure to protect trade secrets and to lower turnover among employees, but the letter claims that the practice has expanded in recent years.

 

"We are requesting that GAO review the available research on the use of [non-compete] agreements and the impact of non-compete contracts on the nation's workforce," the senators wrote.

 

Specifically, the senators want the GAO to look at how prevalent non-compete agreements have become in lower-wage positions, and how these agreements impact the workforce and the economy as a whole.

 

The letter claims that 12 percent of workers earning less than $20,000 and 15 percent of workers earning between $20,000 and $40,000, have signed non-compete agreements. These employees may not know they will be subject to a non-compete agreement until after they have received a job offer, the letter explains.

 

Senator Rubio said on Thursday that the practice was in urgent need of review.

 

"It is unacceptable that non-compete agreements are being used to unnecessarily restrict entry-level workers from pursuing better employment opportunities," Rubio said.

 

The senators also asked for a study of state-level measures taken steps to limit non-compete agreements, and how these have impacted local economies.

 

"The use of non-competes has spread from highly technical fields into less technical and lower wage work, where they might reduce wage and benefit competition among employers and restrict employee's upward mobility--for no good reason," said the letter.

 

The head of the Catholic Social Workers' National Association said the practice of forcing employees, especially lower-wage employees, to sign non-compete agreements is contrary to America's founding ideals and violates the rights of workers.

 

"According to Catholic Social Teachings, our economy must serve the people," Kathleen Neher, co-founder and president of the CSWNA, told CNA.

 

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"Work provides more than money, it provides a sense of community, dignity and participation in God's creation.The basic rights of workers must be respected, which includes helping them grow and achieve their dreams," she said.

Non-compete agreements, she said, only increase the pressures faced by lower-wage workers who, Neher said, often are people students or people with fewer academic qualifications.

 

"We live in America, the land of opportunity," Neher said. "We should never place limits on possibilities for growth."

 

She warned that restrictions on workers like non-compete agreements would have negative impacts on their mental health, and the economy as a whole. Workers, she explained, achieve more when given the chance to do so.

 

"Lower-level employment is there to teach and guide employees so they can move up the ladder of success," she said, which would result in higher tax revenue and more money being spent in the community.