Law360 Will Stop Using Noncompete Clauses

     MANHATTAN (CN) — Laying the hammer down on a LexisNexis-owned legal newswire, New York Attorney General Eric Schneiderman said Wednesday that Law360 will no longer make their reporters sign “unscrupulous” noncompete clauses.
     Law360 forced their reporters, editors, researchers and entry-level news assistants to agree not to seek employment with any other legal news organizations for one year after leaving the company, the AG said.
     A growing number of states across the country — including California, New York, North Dakota, Oregon and Oklahoma — ban or regulate the use of such agreements as a burden on workers seeking a new job.
     New York law only allows employers to use noncompete clauses in limited circumstances when employees have uniquely special skills, or the company needs to protect trade secrets.
     On Wednesday, Schneiderman said that Law360 made these agreements mandatory for the vast majority of its employees, even for first-time journalists hired right out of college.
     “Unless an individual has highly unique skills or access to trade secrets, non-compete clauses have no place in a worker’s employment contract,” Schneiderman said in a statement. “Unscrupulous non-compete agreements not only threaten workers seeking to change jobs, they also serve as a veiled threat to employers who may be reluctant to hire candidates due to the mere existence of a non-compete agreement. Workers like the reporters at Law360 should be able to change jobs and advance their careers without fear of being sued by their prior employer.”
     The U.S. Treasury Department estimated earlier this year that noncompete agreements constrain nearly 30 million people, damaging the bargaining power, wages and professional advancement of 18 percent of the nation’s workforce.
     “Reduced job churn caused by non-competes is itself a concern for the U.S. economy,” the Treasury warned in March. “Job churn helps to raise labor productivity by achieving a better matching of workers and firms, and may facilitate the development of industrial clusters like Silicon Valley.”
     The White House echoed those findings in its own report in May.
     “In addition to reducing job mobility and worker bargaining power, non-competes can negatively impact other companies by constricting the labor pool from which to hire,” its 18-page report said. “Non-competes may also prevent workers from launching new companies. Some critics also argue that non-competes can actually stifle innovation by reducing the diffusion of skills and ideas between companies within a region, which can in turn impact economic growth.”
     Schneiderman’s office says its settlement with Law360 requires the outlet to stop forcing editorial employees to sign the agreements, and inform all current and former employees that these clauses are no longer valid.
     Law360 said in a statement that “being responsive to employee feedback is a crucial element of our philosophy here in striving to make Law360 a great place to work.”
     “We have made a change to our policies by removing non-compete components for all of our editorial staff except specified senior leaders. In doing so, we’ve voluntarily collaborated with the NY Attorney General’s Office and reached a mutual agreement regarding the best possible outcome for our people,” the newswire said. “We’re very appreciative of all our employees’ contributions to our ongoing success and look forward to continuing to focus on what we do best: delivering high-quality news content, at a breaking pace, to the legal community.”

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