Balkinization: From Status to Contract to Fealty

From Status to Contract to Fealty

Frank Pasquale

"Consent" can be a near-universal solvent in employment law, eviscerating rights that would be considered basic outside the workplace. Soon after Independence Day, Alana Semuels reported a new twist on the trend: contracts to tie even low-wage employees to a given workplace, on penalty of not working at any competing business for months or a year afterward:

Mazhar Saleem is bound to his employer by a number of contracts that made it hard to earn enough money to live, but also hard to go work anywhere else. He drives a town car for a company in New York as an independent contractor, rather than as a full-time employee. That means he doesn't get benefits, never gets overtime, and isn't guaranteed set hours.

But he also signed a non-compete contract when he started working, meaning he can't drive a car for anyone else in New York. So even if his employer doesn't give him any work, he's not allowed to go find it elsewhere. . . .

In a recent case in Worcester, Mass., three women working at a hair salon tried to leave after their conditions at work deteriorated. All three received cease and desist letters when they started working elsewhere, because they had signed non-compete clauses. They had to wait a year for the clauses to expire before they could work in the area again.

In fact, these exclusivity clauses even extend to the hunt for temporary, no-benefits work, as Fed governor Sarah Bloom Raskin found out at a job fair:

'So what I need to do is put in my resume and then I’ll be able to get this job?’ And she said ‘yes.’ And I said: ‘while I’m waiting can I go to some other firms and throw my resume into their databases as well?’ And she said ‘oh no, you can’t do that, because you’re going to sign a letter of intent.’ And that letter of intent is basically an exclusivity agreement that says that by putting your resume in here you agree to not put your resume anywhere else.

Corey Robin explains the tricky issues these cases raise for advocates of "freedom of contract." Libertarians often point out a paradox of democratic theory: a dictatorial party could win an election, then decide "no more elections." Is not something similar happening when bosses, emboldened by a terrible job market and a near-infinite supply of cheap labor, bind employees like the hair salon did? If workers have neither voice (no union) nor exit (no chance to seek better employment), what's left but loyalty? Or, to put it feudally, fealty?

Posted 11:38 AM by Frank Pasquale [link]