The Contract You Didn't Realize Some Fast Food Workers Sign

In July, President Joe Biden signed an executive order to help boost the economy. Among these initiatives is a directive for federal agencies, like the Federal Trade Commission, to draft rules prohibiting the use of non-compete clauses in hiring contracts, according to Food & Wine. You might think that these non-compete clauses are designed only for top-level employees who are privy to confidential information — to prevent them from using sensitive insider knowledge against their former company if they leave their positions. However, an estimated one in six food and restaurant workers has signed non-compete clauses, according to The Counter.

Non-compete clauses not only protect sensitive company information. They are also commonly used to prevent employees from leaving to work with a competitor or starting their own competing business, a practice that certainly has far-reaching implications in the restaurant industry. Some employees who are bound by non-competes could be prohibited from leaving one restaurant job to work at another in a certain radius, even if they could be making more money there. Others are kept from accepting a position at any restaurant that could be seen as a competitor of their original employer. "The key idea is that it's going to [get] workers to stay longer, stunt their mobility, prohibit them from taking better jobs in their chosen field, and reduce entrepreneurship," University of Maryland business professor Evan Starr told The Counter.

Non-compete clauses can prevent workers from getting better jobs

From fast food employees to those who work in fine dining, many people who have been forced to sign non-compete agreements as a condition of their jobs say their future employment and earning prospects have been hurt by the restrictive clauses. Some fast food chains even employ the use of "no poach agreements," which prevent employees from working at a different franchise location within the same chain, according to CNN Business. The practice can be particularly frustrating for low-level employees, few of whom are likely to be privy to trade secrets or other sensitive company information.

Some workers are hopeful that the president's executive order will benefit restaurant employees, who will be free to leave their old positions for a new job if the benefits, hours, and pay are better — regardless of whether their new employer is considered a rival of their previous place of work. Others hope that a ban on these clauses may encourage employers to improve their working conditions in order to retain employees. "If your employer wants to keep you, he or she should have to make it worth your while to stay. That's the kind of competition that leads to better wages and greater dignity of work," Biden said (via Food & Wine).