For one major company, legal investigations in two states forced them to eliminate unfair noncompete agreements resulting in a significant victory for workers in the company’s U.S. operations. Companies use noncompete agreements to stop employees from sharing proprietary information with a rival company or a company in the same geographic area when they terminate employment.
The co-working company, WeWork, just agreed that noncompete agreements cannot be universal when they arbitrarily prevent any ex-employees from reasonably finding new work. WeWork is the largest U.S. player in the co-work industry in which companies and entrepreneurs share leased workspace and business services, such as health insurance. In today’s diverse economy, co-working is a growing sector.
The New York attorney general’s office scrutinized the noncompete practices used by WeWork, which applied to all its employees. In previous cases, courts have found that unreasonable or inappropriately broad noncompete clauses can be found unenforceable. As in any other area of employment law, knowing your rights and what is enforceable in employment contracts and clauses is critical. If you have questions, an employment lawyer can review your noncompete clause.
Hazards for Employees: What to Know
A company has a right to enforce employment contracts with noncompete clauses on hire if they contain reasonable provisions and do not violate other laws. In the case of WeWork, the company required noncompete agreements for all its employees across the board, not just executives and technological staff. WeWork required janitorial and bar staff, and executive assistants, many of whom were paid less than $15 per hour, to sign agreements not to work for any of WeWork’s competitors or anywhere WeWork had operations. It applied to all employees, regardless of job title or with access to any confidential or proprietary information. For many staff, this would severely restrict their ability to find future employment.
The New York attorney general began looking at WeWork’s practices while an independent investigation was concurrently underway in Illinois. Following the investigation, the two states collaborated on the resolution with the company, and in 2018, WeWork agreed to adopt one policy applying to its 3,000 plus employees nationwide. In a win for workers, the company agreed to eliminate its noncompete clauses from many employment contracts and that others must be specific and limited to certain positions.
Philadelphia Employment Lawyers at The Gold Law Firm P.C. Understand Noncompete Agreements
If you or someone you know is concerned about signing a noncompete clause for employment, please contact the Philadelphia employment lawyers at The Gold Law Firm P.C. for a free consultation today. Contact us online or call us at 215-569-1999. Located in Philadelphia, we serve clients from the surrounding areas, including Bucks County, Chester County, Delaware County, Montgomery County, and throughout New Jersey.
