Non-competition agreements are intended to protect business by preventing employees from taking the skills they learned at that business and working for their former employer’s competitor. Non-compete agreements in employment contracts, however, have sometimes been used unreasonably and are responsible for decreasing wages and job mobility.
A $3.4 billion company, Cushman & Wakefield, sued a former janitor for breaking a noncompete agreement identified as a nonservice agreement by working for another real estate company in the same building. The case is still in court. The judge issued a temporary injunction preventing the janitor from working at her new job for the next several months.
Workers are reluctant to challenge agreements, even if they are invalid because they often believe that their employer has the upper hand. Workers are concerned that they do not have the ability to fight these agreements in court or do not want to jeopardize their career.
As a result, many employers use these agreements as a threat to keep employees and to suppress wages. Employees reject lucrative job offers and stay in their current jobs longer. Lower wage growth follows this job stagnation because workers cannot use the leverage of quitting while negotiating wage increases, according to the U.S. Department of Treasury.
Regardless, these agreements may be legally invalid or unenforceable in Pennsylvania in certain circumstances. Workers may be able to challenge these clauses or negotiate better terms.
Workers who are presented with these clauses in employment agreements or who must overcome agreements to pursue their career should seek legal representation. An attorney can help workers negotiate better terms or fight invalid agreements.