Schneiderman: Workers Should Be Able To Change Jobs Without Fear Of Being Sued

Attorney General Eric T. Schneiderman recently announced that Law360, one of the top legal news websites in the country, agreed to stop using non-compete agreements that had been mandatory for the vast majority of employees, including some in their first jobs out of college with no journalism experience. Under the settlement agreement, Law360, which is a subsidiary of LexisNexis, will no longer require its editorial employees to sign non-compete agreements, except for a small number of top executives. Law360 will also notify all current employees, and all former employees who left within the last year, that the non-compete agreement is no longer in effect.

“Unless an individual has highly unique skills or access to trade secrets, non-compete clauses have no place in a worker’s employment contract,” said Attorney General Schneiderman. “Unscrupulous non-compete agreements not only threaten workers seeking to change jobs, they also serve as a veiled threat to employers who may be reluctant to hire candidates due to the mere existence of a non-compete agreement. Workers like the reporters at Law360 should be able to change jobs and advance their careers without fear of being sued by their prior employer.”

Prior to the settlement agreement, Law 360 required a majority of employees, including all editorial employees, to sign an employment contract with a non-compete agreement that prohibited them, for one year after leaving the company, from working for any media outlet that provides legal news. Law360 reporters, editors, and researchers – even entry-level “News Assistants” working their first jobs in journalism – were given the agreement typically on or before their first day of work and told to sign as a requirement of employment. The non-compete was not negotiable or waivable. New York law does not permit the use of non-compete agreements, except in very limited circumstances. For example, a non-compete may be allowed to protect trade secrets or where it covers employees with uniquely special skills. Recently, the negative effects that pervasive, unwarranted use of non-compete agreements have on the economy has been the subject of national news articles and research reports. A March 2016 report published by the U.S. Treasury Department found that non-compete agreements cause various harms to “worker welfare, job mobility, business dynamics, and economic growth more generally.” A May 2016 report published by the White House concluded that non-compete agreements also keep wages down and inhibit innovation. Some states have taken action to combat such agreements: California and Oregon have laws prohibiting non-compete agreements altogether or sharply limiting their use, and other states have similar bills pending.

Employees who believe they are subject to an unlawful non-compete agreement are encouraged to contact the New York Attorney General’s office at 212.416.8700 or noncompete@ag.ny.gov with questions or concerns.

This matter was handled by Assistant Attorney General Haeya Yim of the Labor Bureau. The Labor Bureau Deputy Bureau Chief is ReNika Moore and the Bureau Chief is Terri Gerstein. The Executive Deputy Attorney General for Social Justice is Alvin Bragg.