[HN Gopher] Why Are Fast Food Workers Signing Noncompetes?
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Why Are Fast Food Workers Signing Noncompetes?
Author : jseliger
Score : 95 points
Date : 2021-09-30 02:15 UTC (20 hours ago)
(HTM) web link (www.nytimes.com)
(TXT) w3m dump (www.nytimes.com)
| vsskanth wrote:
| Naive question, but I wonder if non-competes have been tested in
| the supreme court if they violate the constitution. Seems like
| the very concept is an infringement on personal liberty and if
| extended too far comes a bit too close to indentured servitude,
| especially in this era of specialization where your livelihood is
| heavily tied to your profession.
|
| Edit: Also, NDAs exist for IP and confidentiality, so why non-
| competes ?
| hemloc_io wrote:
| From one law class I took the way it was explained is this.
|
| The original purpose of non-competes was for people like
| C-Suite executives, and sales people. The point being that you
| don't want sales people walking out the door and taking a whole
| client list with them etc. This makes sense because you want to
| protect things like IP, strategy etc. The theory goes that
| companies wouldn't want to build up long term strategies or
| technologies if those people can just walk out the door and
| bring those things with them. It's also unfair to the company
| that a salesperson can walk out the door with a client list.
|
| For your standard employee it shouldn't be used, but in 2008
| when the recession happened companies got away with it and now
| it's standard even if they're unenforceable. They get "blue
| penned" a lot, where the terms of the non-compete get changed
| in court. IANAL but non-competes have been around forever and I
| doubt they would violate things like the 13th amendment or
| something like that.
|
| Tbh I think the best of both worlds would be that you force
| companies to do the thing Wall Street Traders get. If you want
| to sign a non-compete the company has to pay out the employee's
| salary for X amount of years the company wants them off the
| market. Provides a nice balance where the company can't just
| non-compete everyone b/c now they have skin in the game.
| dragonwriter wrote:
| > From one law class I took the way it was explained is this
|
| > The original purpose of non-competes was for people like
| C-Suite executives, and sales people
|
| It wasn't; the original purpose of noncompetes was for lower-
| rank guildsmen employed by guildmasters; we know this because
| there are British cases adjudicating them back to at least
| the early 15th Century and statutes restricting them back to
| at least the mid 16th.
|
| So, take any explanation that starts with the "C-suite and
| salespeople" origin story as suspect.
| petermcneeley wrote:
| Its interesting because I am guessing that this might be
| done today as educational debt. There were probably laws
| against debt back in the 15th century which prohibited this
| solution.
| thepenis wrote:
| Harrumph!
|
| This is the fag talk I want to see on HackerNews!
|
| Harrumph!
| crocodiletears wrote:
| I've never heard of a fast food worker signing a noncompete
| agreement, and the only evidence that the author provides is that
| 12% of workers earning under 20k annually are under some form of
| noncompete without any context or breakdown by industry sector.
|
| Noncompete clauses are awful imo, but the framing seems
| disingenuous.
| larrybud wrote:
| From a few years back, but here's an example:
| https://www.cnbc.com/2016/06/22/jimmy-johns-drops-non-compet...
| davidgerard wrote:
| archive: https://archive.is/d4pnt
| explodingman wrote:
| https://web.archive.org/web/20210929201944/https://www.nytim...
| diebeforei485 wrote:
| Fortunately this is not a thing in California
| Mikeb85 wrote:
| If it's true, they're probably doing it out of desperation. Or
| perhaps just the knowledge that no judge anywhere in the western
| world would actually uphold a non-compete clause in a fast-food
| worker's employment contact.
| muttled wrote:
| They're just hoping they can scare the inexperienced person by
| telling them that they signed a non-compete, so they can't just
| leave and go across the street. They're not going to take it to
| court. They just hope the employee doesn't know better.
| MeinBlutIstBlau wrote:
| Yes my thoughts exactly. It's completely uneforcable. IIRC
| non-competes are only legal if you literally cannot just hire
| anybody off the street. The simple fact that restaurants near
| me are moving over from english to spanish speaking staff is
| evidence that you don't even need to speak the native
| language to get the job.
| nasmorn wrote:
| I don't think they need to be outright banned but for the
| duration of the non compete the employer should have to keep
| paying the salary. They can then keep workers from joining a
| competitor if it is important to them. But the cost associated
| will prohibit its use as a scare tactic.
| himinlomax wrote:
| That's how it works in many European countries. I once had a
| job with a boilerplate non-compete, the clause made it clear
| how much they would pay me if they chose to enforce it. When I
| quit, they immediately informed me they were not
| enforcing/paying for it.
| HWR_14 wrote:
| > for the duration of the non compete the employer should have
| to keep paying the salary.
|
| How does that interact with many people needing to get a new
| job to get a raise?
| brewdad wrote:
| You'd have to go work a retail job instead of fast food but
| McD's would still be on the hook for your original pay.
| ThePadawan wrote:
| How is what you're describing (paying someone a salary to
| provide value to the company) different from "employment"?
| anang wrote:
| I think the implication is that salary is paid regardless of
| employment, as long as the non compete is enforced.
|
| So if I quit McDonald's they have to either keep paying me or
| release me from the non-compete and allow me to work at
| Burger King.
|
| I think it's totally fair.
| [deleted]
| smorgusofborg wrote:
| It is employment with severe restrictions on job
| requirements, while not paying someone for providing years of
| service is indentured servitude.
| inglor_cz wrote:
| Alternatively, they could only be allowed for highly paid jobs,
| say, 10x minimum wage and more.
| cratermoon wrote:
| That sounds like a really powerful way to put downward
| pressure on the minimum wage.
| inglor_cz wrote:
| An interesting retort. I did not think about this scenario.
|
| Wages are notoriously sticky, but there could be pressure
| to keep the minimum wage stay put in periods of great
| inflation. Such as the one that we might face soon.
| Possibly, we are already in.
|
| Maybe the limit could be derived from the median wage. Such
| as "only jobs that earn 4x or more median wage can be
| subject to noncompetes".
| cratermoon wrote:
| Counterpoint: noncompetes should not be allowed at all.
| Employers shouldn't be able to control the livelihoods of
| people who don't work for them. If they fear theft of
| trade secrets, there are already laws in place for that.
| ultrasaurus wrote:
| This is common in the financial industry:
| https://www.investopedia.com/terms/g/gardening-leave.asp
| literallyaduck wrote:
| Some states ban pay day loans. Talk to your state reps and ask
| them to ban non-competes and fine companies which attempt to do
| business in the state but block the state from hiring.
| aaron695 wrote:
| This is a lie Biden made up -
|
| https://www.factcheck.org/2020/07/bidens-false-claim-about-m...
|
| Good work NYT
| cardiffspaceman wrote:
| The FA says this is the kind of non-compete that your server at
| Burger King might have to sign:
|
| "The contracts prohibit employees who quit from taking a job at a
| competitor for a period ranging from months to years."
|
| This is definitely intended to keep chain-A employees from
| defecting to chain-B for better working conditions.
|
| The final tool in a person's toolbelt for labor negotiations is
| the resignation. This type of agreement is intended more to
| prevent resignations than to prevent leaks of valuable business
| strategy or similar.
| MeinBlutIstBlau wrote:
| These non-competes are 100% illegal and unenforceable. The NLRB
| would back the employees in a heartbeat and companies are just
| using it as a scare tactic cause they know they can't defend
| it.
| lovich wrote:
| The cost of enforcing your rights is usually beyond the means
| of someone working a minimum wage job.
| spoonjim wrote:
| The McDonalds employees are not likely to know this. The
| contract itself is abusive, and its unenforceability is not a
| defense.
| brewdad wrote:
| Is McDonalds really suing min wage workers who leave for
| Wendy's to get a better schedule or 25 cents more per hour?
| I get that they could but I can't see how that's ever a
| reasonable business decision.
| spoonjim wrote:
| They most likely aren't. But putting that in the contract
| can make workers think they can't take that Wendy's job.
| I cannot think of two entities with a bigger power gulf
| than McDonalds and a McDonalds worker, so the
| expectations must be calibrated accordingly.
| Ekaros wrote:
| Now I wonder what sort of judgement they could even get?
| Worker has to come back? Worker has to pay some fraction
| of the perceived losses of that restaurant? Worker has to
| pay some fraction of their wages?
|
| And then would this even pass through the system?
| TheCoelacanth wrote:
| I think the most likely judgement would be that the
| worker has to quit their job at the competing business.
| smorgusofborg wrote:
| If the employee were compelled to quit, unemployment
| couldn't go after the worker for the lost job, so they
| would want to go after McDonald's for 2.5 years of
| unemployment instead of .5 years for every worker they
| break.
| LegitShady wrote:
| Making examples of a few is a more efficient option than
| suing everyone. But this is insanity, and should be
| legislated against.
| Reubachi wrote:
| It's not illegal by any means, it's ability to be enforced is
| questionable though given precedent. Look at any tech firm
| with CEOs whom used to be with their firm's competitor;
|
| That's a large chunk of chief legal officer work, getting new
| hires out of the non-competes by proving the contract was not
| enforcable in the eyes of an average reasonable person in
| that locale.
|
| But...FF employees won't have a dedicated lawyer, unless
| there's some frivolous class action that doesn't truly
| represent the employees.
|
| I think, we'd all be surprised to find that many "illicit"
| things aren't illegal at all, but rather would get struck
| down in a civil court if sufficiently challenged, and that
| much of our economy is driven by that.
| [deleted]
| ep103 wrote:
| They are absolutely enforceable.
|
| A court might not enforce them, because, depending on your
| state, they may be of questionable validity.
|
| But people who don't know that will believe they are
| enforced.
|
| People who aren't willing to risk going to court will have to
| act as if they are enforced.
|
| People who can't afford to go to court will have to act like
| they are enforced.
|
| *Additionally, I have seen these contracts enforced outside
| the court system as well.*
|
| I had a friend who was fired from a job he went to, because
| his former employer called his future employer, and
| threatened a lawsuit / threatened to drop mutual business
| because the future employer helped the employee break the
| non-compete agreement.
|
| The past employer may not have had any case (except for the
| lost business), but the future employer didn't want to deal
| with legal trouble, and it was easier to just find a reason
| to fire the employee.
|
| How sure are you that you won't be fired at your new job,
| because a conversation like that took place behind closed
| doors?
|
| How sure are you that McDonalds would be willing to foot a
| legal bill to defend their new minimum wage employee, if
| Burger King threatened legal action?
|
| Non-compete abuse needs legal reform.
| mushbino wrote:
| Can you find a case of where they've successfully sued
| someone for this?
| testesttest wrote:
| The point is they don't have to be successful to have
| teeth. A fast food worker probably can't afford a single
| day in court.
| dddw wrote:
| "Typically low-wage workers aren't privy to trade secrets"
| biaachmonkie wrote:
| Hey now, the "Secret Sauce" is super secret and deserving of
| extensive protections!
| theandrewbailey wrote:
| It comes off the truck in a bag. Heat it. Squirt it. Serve.
| MeinBlutIstBlau wrote:
| I thought non-competes could only be enforceable if the purpose
| of it was to prevent poaching and your knowledge of the company
| is vital to it's ability to compete, but on a high level (like
| you're a partner or established something significant). You can't
| say "we own you, you can't go elsewhere to do general labor."
| Ekaros wrote:
| As consultant I have non-compete for same customer and same
| project. It seems reasonable to me. My company sells my work to
| someone, and someone else can't skim the profits from that
| process. Still, I'm entirely free to work with someone else
| with someone else.
| cafard wrote:
| According to the Chamber of Commerce, "They are contracts freely
| bargained for before or during a period of employment. The
| employee gains something valuable in exchange for the voluntary
| commitment."
|
| Back in my brief employment in the fast food business, I gained
| something valuable: minimum wage. Are today's milkshake makers
| and pizza schleppers earning something more valuable?
|
| "Where concerns go beyond antitrust, the chamber says, they
| should be judged by courts under contract law or "left to state
| legislatures."
|
| In military terms this is called "defeat them in detail," I
| believe.
| Joker_vD wrote:
| Ah, the idea that "contracts freely bargained" are fair. Sure,
| most people do think that working 10 hours in exchange for
| minimal wage is a better proposition than starving under open
| sky at full leisure, so such employments are (mutually)
| beneficial market transactions. They are. But the question is
| not if they're mutually beneficial, the question is are they
| _fair_?
|
| There is quite some gap between the minimal wage that's enough
| for subsistence and the maximal wage that still won't ruin the
| business, so the actual wages land anywhere in the middle as a
| result of those conflicting constraints.
| gruez wrote:
| >There is quite some gap between the minimal wage that's
| enough for subsistence and the maximal wage that still won't
| ruin the business, so the actual wages land anywhere in the
| middle as a result of those conflicting constraints.
|
| Source? My impression is that fast food restaurants run on
| thin margins.
| ziddoap wrote:
| McDonalds had a gross profit of ~10B and net income of ~6B
| in 2018.
|
| Maybe we have different ideas of thin margins.
| gruez wrote:
| 1. what's their revenue? Walmart has 13 billion in net
| income. That might sound like a lot, until you realize
| that they make 559 billion in revenue, which works out to
| a relatively thin margin of 2.4%.
|
| 2. not an accountant, but the fact that mcdonalds
| licenses their brand to franchisees probably messes with
| their profitability figures. They might be making 50%
| margin on franchise fees, but that doesn't mean the
| actual restaurant has 50% spare cash to spend on
| employees.
| ziddoap wrote:
| Revenue was ~21B, =~ 28% margin.
|
| I'm also not an accountant so I'm not about to speculate
| on the rest. Maybe your right and it's a factor.
| brewdad wrote:
| That's at the corporate level though. They are largely
| making their money from selling food or renting space to
| franchisees. The individual store's margins (the ones
| paying the actual burger flippers) would be quite a bit
| lower I assume.
| syshum wrote:
| >>something more valuable?
|
| yes? I am not aware of any fast food chain paying minimum wage
| (at least not the federal min wage in the US)
|
| In my area most are about 2x Minimum Wage being advertised,
| with interview and signon bonuses
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