The agreements, often associated with white-collar workers, have become increasingly common in trade or specialty fields.
The following article was originally published in the Ohio Capital Journal and published on News5Cleveland.com under a content-sharing agreement.The intent is to ensure an employee who leaves a company can’t carry off that company’s business with them. But the practice can be devastating for workers looking for their next job.To the layperson they likely evoke white-collar, c-suite level jobs. Nike understandably might not want their COO to become the next CEO at Reebok.
The FTC contends 1 in 5 American workers — roughly 30 million people — are subject to a non-compete agreement. The agency argues these contracts reduce wages by curtailing the flow of workers between employers and stifling the creation of new businesses. “It’s not like it’s now shuttered business in a place like California,” Brosnan argued. “We’ve seen industries that depend on things like trade secrets, or other kinds of key, high-level information like that have been able to still continue and flourish.”The FTC’s position borrows from a familiar formula long popular among conservatives: increase growth by reducing barriers in the marketplace.
As for the proposal’s impact on workers, the lawmakers argue the FTC itself concedes “the rule could lead to less employee training, less investment, and fewer new jobs.” Holbrook started looking around the area and found a highly regarded salon in Perrysburg called Soto. In talking with the owners, she was told some stylists were clearing $75,000 a year working 21 hours a week. What’s more, Holbrook is an extensions specialist, and that was something they could really use.
The agreement prohibits workers from taking a job providing cosmetology services anywhere within 15 radial miles of Soto. To put that in context, 15 miles north of Soto is about two miles into Michigan. It’s particularly frustrating for her because she tried so hard to be cautious and plan ahead. Holbrook commuted for the first few months to make sure Soto would be a good fit. Her plan was to rent for a year and then use the proceeds from her home sale in Michigan to make a big down payment. Hopefully, she explained, there’d be enough to set aside money for her youngest daughter, to “give her something to stand on.
She argued the agreements protect their investments in a worker’s education and development. Johnson said Soto provides training, mentoring, and continuing education “at no charge.” And while Johnson made arguments about the cost of training and continuing education, Holbrook had more than 20 years of experience before she walked in the door. With that level of experience, Holbrook contends, she didn’t receive training or proprietary information from her time at Soto.
“Shame on me that I didn’t really look at everything that I was signing,” Eischen said. “But in no way, shape, or form did anybody put this document in front of me and say, ‘and this is the noncompete, should our employment ever cease, this is what’s going to happen.’” “I had 8,000 products that I was responsible for, and I went through five price increases,” she said. “I don’t even know all the different categories that I sold into, let alone understand what the price of ballpoint valve was.”Although Eischen lives in another state, lawyers have warned her she is still bound by the Ohio contract. Because the agreement’s provisions are “global” she doesn’t even have the ability to pick up stakes and try to find similar work elsewhere.
She said it was sharp contrast with the work environment in California. Without the leverage of a non-compete, employers had to work to attract new employees and to keep existing staffers. She explained that translates to more generous workplace policies.
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