Non-compete agreements are controversial, yet unfortunately commonplace in New York. With the recent COVID-19 pandemic, as of the time of this writing, a record 10 million people have filed for unemployment benefits in the United States. See Avie Schneider, Staggering: Record 10 Million File for Unemployment in 2 Weeks, NPR (April 2, 2020). This number is expected to grow, with many experts predicting a 13 percent unemployment rate. See Justin Wolfers, The Unemployment Rate Is Probably Around 13 Percent, N.Y. Times (April 3, 2020). If an employee is also saddled with a non-compete agreement, the reduced job opportunities that exist will become even tougher to obtain and maintain for those in need of a position. While both high-earning and low-earning employees are impacted by non-compete agreements, lower income earners do not have the resources to mount a fight against a company seeking to enforce the non-compete.
The COVID-19 pandemic, with its epicenter in New York, starkly exposes the great risk faced by low-wage earners previously employed at restaurants, hotels, retail operations and other “non-essential” businesses which have been forced to close as well as the inequality among workers. Despite significant action by other states, New York state has yet to enact legislation with restrictions for non-compete agreements to protect low-wage earners in its jurisdiction. Even prior to the COVID-19 pandemic, a growing number of states such as Maine, New Hampshire, Maryland, Oregon, Washington, Rhode Island, with legislation that went into effect in 2019 or this year, have recognized the problems associated with the use and enforcement of non-competes against low income earning workers and have passed legislation to combat this problem. Illinois and Massachusetts had enacted protections for lower wage worker in this area a few years prior to this recent state action.
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