Non Compete Clauses: Fair or Foul?

Non Compete Clauses: Fair or Foul?

Below is a reprint of an article discussing House Bill 1926, introduced into the Washington State legislature in 2015 and reintroduced in January 2016. We at NWCS do NOT include these clauses in our employee contracts. We believe ‘non-competes’ are unfair, uncompetitive and misused by many of our competitors who use these contract clauses to restrict your rights to seek employment in a free market.

 

Rep. Derek Stanford introduces bill to ban non-compete agreements

February 3, 2015 | By Washington House Democrats

OLYMPIA – In Washington state some of the best and brightest future entrepreneurs are knocked out of the running by overused non-compete agreements that reinforce the wealthy and stifle startups.

But today the House Labor Committee heard House Bill 1926, a bill from Rep. Derek Stanford (D – Bothell) that would prohibit all future non-compete agreements in Washington, with few exceptions.

“Non-compete agreements have ballooned into a business practice that’s used too often and too broadly,” Stanford said. “Of course, there are legitimate business interests in protecting things like proprietary information and trade secrets, but those can be protected by non-disclosure agreements. The overuse of non-compete agreements only hurts workers and discourages entrepreneurs.”

Non-compete agreements are often used in the technology industry, where even temporary software developers, coders and web designers are forced to sign contracts that prohibit them from finding a “similar” job after their temporary employment ends. While large tech companies claim that prohibiting non-compete contracts would hurt business, Stanford cited evidence to the contrary in today’s hearing.

“California beat us to banning non-compete agreements — back in 1872,” Stanford said. “We’ve all heard of the Silicon Valley and companies like Apple, Google, Intel, Adobe and Facebook. These are all companies that thrive in a state where non-compete agreements have been banned for more than 100 years.”

Non-compete agreements are not only used for restricting future work for highly-skilled employees in the creative and tech industries. Last spring, The Seattle Times reported on a wage worker who left a $15 an hour job in water-damage cleanup with ServiceMaster of Seattle — a franchise of a national corporation worth $3.4 billion — when he was offered an $18 an hour job at Superior Cleaning of Woodinville. ServiceMaster sued the worker to force him to quit his job on the grounds he signed a non-competition clause that supposedly prohibited him from working in water-damage jobs. For that matter, ServiceMaster claimed he couldn’t work in fire-damage jobs, janitorial, window washing, floor- or carpet-cleaning jobs since ServiceMaster also offered those services.

Stanford’s bill is awaiting a vote in the House Labor Committee.