A ban on non-competes will help Latino communities thrive in both blue- and white-collar jobs. 

This is a translation of the op-ed ¿Cláusulas de no competencia? Trabajadores latinos, es hora de oponerse a ellas?, published in El Tiempo Latino. 

By Karina Montoya 

In 2017, Michael, a single father living in Florida, found a new job at a bank as a security guard, after having resigned his previous employer due to a family emergency. A few months into the new job, he was fired. Almost a decade earlier, a textile factory manager named Keith in North Carolina switched jobs at a rival company that offered him a better salary. A few months later, he was fired, too. Both had one thing in common: their previous employers made them sign non-compete clauses as part of their contracts. Their new employers were notified and told to let the employees go or risk a lawsuit. 

Non-compete clauses prevent workers from joining a competing employer or starting a new competing business after they leave their post for an established period of time that can last for months and within a certain geographic area. Earlier this month, the Federal Trade Commission (FTC) — an agency with authority to define and prohibit unfair methods of competition — proposed a federal ban on these agreements, which will impact payroll workers as well as freelancers. The proposal would also invalidate current non-competes, releasing an estimated 30 million Americans from the restrictive contracts.  

Non-competes are commonplace in the industries that employed Michael and Keith, which also happen to employ many Latino workers. In security services, for example, Latinos represent 17 percent of workers, while in the textile industry — anything from apparel to leather manufacturing — that figure is 28 percent, according to the latest data by the Bureau of Labor Statistics.  

A ban on non-competes will be critical to the future of a fair and inclusive labor market. For Latino workers in particular, such a ban will help them thrive either in blue-collar jobs where they already are an engine of growth for this country, and in white-collar professions where Latinos are increasingly present, especially those from the younger U.S.-born generation.  

Non-competes were long believed to only affect high-level executives, with research showing that the higher the income and years of formal education, the greater the likelihood of coming across a non-compete agreement. But today, such agreements affect one in five American workers, many of them rank-and-file employees, across a variety of industries. And in many industries, the use of non-competes can disproportionally affect Latino workers in comparison to other non-white groups.  

In construction, for example, a study by the Economic Innovation Group shows that the use of non-competes stands at 11 percent. Latinos represent 33 percent of that workforce. In agriculture, the use of non-competes is estimated at 9 percent, with Latinos accounting for 34 percent in crop production.  

Even as Latinos move to more white-collar jobs, they are also cornered by non-competes. Data security analysts, public relations specialists, and supply-chain specialists are among the fastest growing jobs for Latinos and Hispanics in recent years, and the use of non-competes in these sectors can be as high as 32 percent. 

This proposed FTC ruling represents a pivotal change in the way regulators have overseen business practices in the last five decades. My employer, Open Markets Institute, alongside a coalition of scholars, labor and public interest groups have called multiple times on the FTC to use its rulemaking power and outlaw non-competes. Judging by the public comments submitted to the FTC in regards to this ruling, massive support is coming from all side of the labor market, including fitness trainers, family business owners, and technical equipment managers. 

I personally heard about non-competes more than a decade ago and was given the same narrative that continues to stick around: if you are faced with one, you will be able to negotiate a great salary and other perks. But a high-quality survey in 2014 found that employers tend to tuck non-competes inside employee handbooks, or disclose them once a job offer has been accepted. Others may fear that objecting to the non-compete could lead to an employer rescinding their offer. No wonder why nine in 10 workers simply sign them and don’t engage in any negotiation, according to the 2014 survey. I, too, was part of that statistic when I signed my first non-compete in an industry I will not go back to. 

Due to many reasons, including immigration status or limited access to legal representation, Latino workers are less inclined to fight back against these restrictions. This regulatory change represents a unique opportunity to embolden U.S. Latino families to take more risks in seeking better work conditions, or to create their own, so that they continue building the type of wealth that will make American democracy more just and inclusive. 

 Read full article in Spanish here.