Weekend News & Commentary—June 30th, 2019


Published June 30th, 2019 - 06.30.199


The Wall Street Journal reported this weekend that many companies are requiring summer interns to sign noncompete, non-disclosure, and forced arbitration agreements that can negatively impact their employment prospects. The report notes that while summer internships are supposed to assist college students in building their career, the agreements might limit their options after graduation. While they may be unenforceable in some states, the report highlights that non-competes can exert a “deterrent effect,” as risk-averse former interns give up the opportunity to find violating positions rather than test the legal validity of a clause.

Noncompetes have remained a controversial topic, after backlash in 2016 led Jimmy Johns to end their practice that restricted its low-wage employees from accepting employment at any other restaurant that sells “submarine, hero-type, deli-style, pita, and/or wrapped or rolled sandwiches.” With public opinion turning, many states have taken explicit action to curb the practice, imposing different kinds of limitations to reduce their effect. In May of this year, Maryland prohibited noncompete agreements for any employee making less than $15/hour.  Similar laws exist in Washington and Oregon. In 2016, OnLabor contributor Hannah Belitz wrote that states like Idaho and Utah have laws that limit the clauses’ durational effect, although outright bans like California’s have failed in state legislatures.

The U.S. Women’s National Soccer Team has continued its winning streak, beating France on Friday 2-1. They’ve also remained central to a national conversation about pay equity. After receiving a right to sue letter from the EEOC, in March all 28 members of the team sued the U.S. Soccer Federation, alleging lower pay and fewer training resources than the less-successful Men’s Team. In addition to winning more games and earning more titles, The Wall Street Journal reported this weekend that since their 2015 World Cup victory, the Women’s Team has also brought in more ticket-sale revenue than the Men’s Team. The lawsuit alleges that a Federation representative suggested in 2016 the pay disparity was justified because “market realities are such that the women do not deserve to be paid equally to the men.”

Three years since the Universal Paid Leave Act was passed into law, Washington, DC’s paid family leave proposal is finally gearing up. Beginning July 1, employers in Washington, DC that are liable for unemployment insurance payments will begin paying the .62% quarterly payroll tax, creating a fund to provide 8 weeks of paid parental leave and two weeks of personal sick leave. The act caps weekly benefits at $1000, and employees will become eligible starting in July 2020. Since its passage without the approval of DC Mayor Muriel Bowser, the law has been controversial, with many believing it will hurt small businesses and provide outsized benefit to well-off workers who commute to the city from the suburbs. Several amendments were considered and failed during last year’s contentious city council elections.

On Friday, The New York Times released an investigative report about exploitative franchising practices employed by Subway, and the way the company took advantage of individual store-owners to find trivial violations and cost them their business. The report included internal text messages and reports of “bullying” from Subway’s corporate leadership that evince a desire to find false or frivolous violations.  These have led to the termination of largely family- and immigrant-owned franchises, and are speculated to help reduce the company’s rising costs and liabilities as they’ve faced PR and competitive challenges in recent years.

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