Posts Tagged ‘Freedom of Contract’

Freedom of contract or corporate Big Brother?

March 30, 2015

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.

(more…)

What’s next – indentured servitude?

July 12, 2013

The Los Angeles Times reported:

Emboldened by a series of Supreme Court decisions and an employers’ job market, many companies are starting to require workers to sign away their rights in return for a job.  It is a trend that experts worry could further wear away employees’ power in the workplace. 

The contracts make it harder for employees to join class-action lawsuits, take their employers to court, or leave to go work somewhere else.  […]

Non-compete clauses, once a staple of the high-tech world, are being extended to cover hairdressers, auto mechanics, exterminators and other professions that courts would traditionally not uphold them for, lawyers say.  They essentially mean an employee can’t leave a job to take another one nearby, unless he or she wants to stop working for a year or so.

via latimes.com.

As Justice Oliver Wendell Holmes Jr. wrote, freedom of contract begins where equality of bargaining power begins.   I don’t see how these kinds of contracts can be regarded as voluntary except in an extremely narrow and technical sense.

New hires were once required to sign “yellow dog contracts” giving up the right to union representation.   The Wagner Act of 1935 declared these contracts unenforceable.   I think any contract should be regarded as unenforceable if the weaker party is required to sign away a basic right.  If the courts don’t recognize this principle, it should be spelled out in legislation.

Click on Contracts, court rulings giving employers legal upper hand for the full article in the Los Angeles Times.