Monday, April 09, 2018

Contract serfdom

The US labour market is already dysfunctional, with forced arbitration, health-insurance lock-in, and non-compete clauses combining to prevent workers from switching jobs and reducing pressure for wage rises. But US employers have invented a new form of abuse: forcing workers to pay if they want to quit:

Among other things, Sinclair contracts contain a requirement that employees must pay their employers if they leave their jobs before their contract terms end. For example, an employee making $50,000 annually might have to pay in the ballpark of $10,000 if she wanted to leave after one year of a two-year term.

While it’s plainly illegal to impose a penalty on employees for leaving a job, the contract describes this requirement as “liquidated damages”. But such damages are allowed only in very limited situations, such as when an employee leaves a job shortly after receiving, at the employer’s expense, costly, specific, and transportable training. This is hardly the situation for Sinclair employees.

The Sinclair contracts also contain a non-compete clause, barring employees from working for competitors for a set time period after separation.

Previously, American workers at least had the power to tell their bosses to take their job and shove it. Now they can't even do that. Like medieval serfs, they have to buy their freedom.