Freedom of contract or corporate Big Brother?

Freedom of contract begins where equality of bargaining power begins.
    ==Oliver Wendell Holmes Jr.

No contract that requires someone to give up a basic right should be legally enforceable.

A contract to sell yourself into slavery is not legally enforceable.  A yellow-dog contract, which requires you to give up your right to join a labor union, is not legally enforceable.

So what about Amazon’s practice of requiring even temporary employees to sign 18-month non-compete agreements as a condition for employment?

Noncompete_CartoonThe Verge obtained a copy of the contract that forbids Amazon workers, for 18 months after leaving Amazon employment, from going to work for any company that “directly or indirectly” supplies any good or service they helped support at Amazon.

Such non-complete agreements are required even for temporary warehouse workers, who typically work for three months during the Christmas season, The Verge reported.  In return for that short stint of work, they’re asked to give up any chance of working for an Amazon competitor—and, since Amazon is “the everything store,” that would mean virtually any job in retailing anywhere in the world.

In other words, Amazon workers are asked to give up a basic right that they supposedly have in a free enterprise system—the right to freely seek work from any employer willing to hire them.

A study, based on an on-line survey of 10,000 American workers conducted by the University of Illinois at Urbana-Champagne and the University of Michigan, determined that 12 percent are covered by non-complete agreements,  The Verge reported.  This includes 9 percent of warehouse and transportation workers.

Evan Starr, co-author of the study, told The Verge that the percentages are probably underestimated because workers sign non-compete agreements without realizing what they’ve signed.

There are employers who go even further to limit employees’ freedom off the job.  Menards Inc., a Wisconsin chain of home improvement stores, forbids employees to build houses, on the theory that this might tempt them to steal building materials.

Milwaukee magazine reported that Menards’ fired an lumberyard manager named Eldon Helget, who had to build a new house with ramp facilities to accommodate his handicapped daughter.

The free-enterprise system in theory consists of voluntary choices among free individuals to exchange goods and services.  The capitalist system in practice consists of individuals trying to deal with organizations vastly more powerful than they are.

Freedom requires checks on private power as well as on government power.


Amazon makes even temporary workers sign 18-month non-completes by Spencer Woodman for The Verge.

How home improvement store founder John Menard became the richest man in Wisconsin – and what he sacrificed to do it by Mary Van Den Kamp Nohl for Milwaukee magazine.  Mike the Mad Biologist quoted the key points.

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2 Responses to “Freedom of contract or corporate Big Brother?”

  1. tiffany267 Says:

    I recently signed a noncompete agreement. I do not have any problem with this, nor do I feel that I’ve given up any rights. I voluntarily chose to receive pay and benefits as well as knowledge, training, connections, and experience in exchange for helping a corporation turn a profit for its shareholders without compromising its ability to continue to do so in the foreseeable future. It costs a corporation a great deal of money to take on new staff, train them, and oversee them, and it can involve a lot of risk. If a corporation knows that its efforts are being wasted on the kind of person who has no appreciation for this investment and would gladly contribute the knowledge they gained as a result of XYZ Co. to ABC Inc., then it is only fair that this person should be held liable for the losses incurred.

    In a way, employees like this are similar to (in my opinion, probably less moral than) people who engage in insider trading. At the expense of those who trusted and invested in them, they are seeking a secret, unearned personal gain. It is fine and well to be out for one’s own interests, but not at the expense of those who have placed their trust in you to accomplish a goal or objective. After the recession beginning around 2008, I heard sad stories from those whose investments lost value (I did not have any investments at that time, and therefore I had no losses – I’m a very low-risk type). It is not necessarily CEOs but shareholders who lose out when trust is broken. I have a responsibility to the shareholders without whom I would have no income and no position. I will be honest in my dealings, even after leaving the company I work for, knowing that I only have this position in order to help them become more profitable.


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