What Could the End of Non-Compete Clauses Mean for Journalists?
On Thursday, January 5, the Federal Trade Commission (FTC) of the United States revealed that it is moving to bar “non-compete clauses” from worker’s contracts. A non-compete clause, or a non-compete agreement is “a legal agreement or clause in a contract specifying that an employee must not enter into competition with an employer after the employment period is over. These agreements also prohibit the employee from revealing proprietary information or secrets to any other parties during or after employment.”
Journalists have often been hit with these, especially if they are working in major newsrooms like those run by The New York Times or The Washington Post. Currently, about 30 million Americans are under non-compete agreements. While the FTC has not succeeded yet in banning these and likely has a long legal battle ahead of them, it’s worth noting how this could affect journalists in the near future.
Non-compete clauses are not only a journalism problem, they are a poverty problem. In fact, a staggering 14 percent of workers who earn under $40,000 annually are subject to these clauses. Sandwich giant Jimmy John’s tried to stop workers from working at another restaurant within three miles of a Jimmy John’s until the state of Illinois sued them to stop the practice. In her testimony before the FTC, commissioner Rebecca Slaughter testified to several more instances, including camp counselors who were prevented from working for other camps for years after their initial contract; a day laborer who was forbidden from seeking higher paying work at a competing environmental drilling firm; and a Florida security guard who was barred from working security in any other location in the entirety of Florida.
“Noncompete agreements reduce wages. Your employer doesn’t have to pay you bigger wages if they know that you don’t have outside options,” said Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, to Yahoo Money. President Joe Biden has also weighed in, noting that these clauses “unduly limit workers’ ability to change jobs.”
Non-compete clauses are more common in broadcast journalism, especially for news station anchors. This creates an issue in the event of any economic or labor crisis wherein the journalist could be laid off or see their hours reduced because then they cannot seek out employment at another news station. Only in Connecticut, Illinois, Maine, Massachusetts, New York, Utah, Washington, and Washington, D.C., are broadcast journalists exempt from noncompete clauses, which means journalists in 42 states are tied to their jobs for better or for worse.
Journalist Stephanie Russell-Kraft recalled how signing a noncompete agreement would later derail her career: “After two years and a promotion at Law360, during which time colleagues left for a variety of competing publications, I accepted an offer in the fall of 2015 to join the Reuters legal news team covering the business of law… During my second week at the new job, a lawyer from Law360 wrote in a letter to the general counsel of Reuters that I was at risk of violating my non-compete and nondisclosure agreement.” Russell-Kraft was then fired from Reuters and, at the time of writing, was making 40 percent less in freelancing than her starting salary at Reuters.
In 2017, CNN reported that the Independent Journal Review (IJR), a right-leaning publication, forced all employees—including entry level employees making around $35,000 per year—to sign non-compete agreements that would bar them from working at any competing newsrooms for six months after their employment with IJR ended. What’s more, legal analysts say that these companies rely on their employees being too poor and underpaid to mount a legal challenge to some of the provisions in non-compete agreements, such as clauses that forbid journalists from “casting a negative light” on their employers. “After I was fired,” said Russell-Kraft, “I spoke with many lawyers who told me Law360’s contract was probably illegal. I did not, however, have $50,000 to cover the cost of proving it in court.”
There is no doubt that the FTC’s move to ban non compete agreements will have long-reaching positive consequences for American workers, and especially American journalists. Should the commission move to ban non-compete agreements officially, it will take about six months before the law will be enforceable on the federal level. Journalists and journalism both benefit from variety and from changing jobs—it’s very important that there are no legal or financial barriers to prevent them from doing so, for the health of journalism itself and the health of American democracy.
