State moves to help workers hurt by noncompete rules

Low-wage workers chasing the American Dream are stifled by new corporate tactics that effectively restrict their mobility and wages at the same time.

Once standard in highpaying corporate suites, where trade secrets and confidential company information are crucial to success, businesses now use the threat of legal action to forcibly retain even entry-level employees.

When starting new jobs, many low-wage workers are essentially forced to agree to noncompete documents, barring them from seeking similar employment within nearby geographic areas for a year or more, even if they never find out the recipe for the secret sauce.

But legislation is advancing that would help workers and put employers on notice. A bill recently passed along party lines in the legislative Labor Committee and awaits further action in the House of Representatives that would protect low-paid workers.

Jane D., a 63-year-old health care worker in the Hartford area, didn’t think much about the papers she signed 10 years ago when she took a minimum-wage job in a senior facility. But when her employer was on the verge of ceasing services there recently, she was warned that a noncompete covenant prohibited her from continuing her $12per-hour job with the residents she showered, dressed and befriended.

“This was like a dagger to my heart,” she said during a recent interview at Greater Hartford Legal Aid. “It didn’t just affect us, the employees, it affected the clients as well. Some people have dementia, early dementia, you know, memory issues. There are people who have no family at all.”

The facility’s staff was called together and workers were informed that their employer was leaving. “As the meeting proceeded, they explained to us that we would not be allowed to work for the incoming company for six months, because we had signed a noncompete document,” she said. “I am not sure I was aware of that when I signed that.”

Most low-wage workers don’t have the money to fight back.

Unfortunately, under the current law, noncompete agreements are considered valid unless the terms are ruled in court to be unreasonable on the issues of geographical areas and time periods, Levy said.

Some employers say they need the agreements to protect their investments in training workers. During a recent public hearing, David L. Denvir, general counsel for Companions & Homemakers, Inc., a Farmington-based company with 2,500 employees, said “misconceptions and mischaracterizations” complicate the issue.

He told state lawmakers that his firm uses nonsolicitation agreements to protect their business. If a home aide quits, they cannot return to the particular home where they were assisting the residents for six months. “These agreements assure that home care employees, home care recipients and home care employers benefit from supportive, long-term relationships that include the full benefits that only agency employment can provide, as opposed to the inconsistent employment of a referral or self-directed care model,” Denvir’s written testimony said.

Lewis Chimes, a Stamford attorney who as cochairman of the employment section of the Connecticut Trial Lawyers Association worked on developing the pending legislation, said that the tactic of noncompete requirements has also spread into trades such as plumbing and veterinary hospitals. While they are enforceable in court, agreements can also be scrutinized for their reasonableness.

He noted two cases in which he was able to negotiate a plumber and a hairdresser out of their noncompete agreements.

During recent testimony to General Assembly, Sal Luciano, president of the state AFL-CIO, said that the legal hindrance against job mobility has trickled from highly paid corporate jobs, down into service, restaurant and hospitality industries. He noted that even Amazon warehouse employees, who ship and receive most types of goods, agree to an 18-month period in which they cannot get jobs handling any product or service sold by the giant corporation.

“The growing use of noncompete agreements is another way that employers are rigging the system,” Luciano told lawmakers. “By eliminating a worker’s right to move to a betterpaying position, they artificially suppress wages, which in turn reduces overall economic growth.”