Ban Corporations from Opting Out of Worker Protections

Labor Protections Build Worker Power

During the 20th century, workers organizing for good jobs won legal protections that created basic standards in the workplace, such as minimum wage, overtime, and protection against discrimination.

These laws are key in building worker power, supporting communities, and holding corporations accountable. However, corporations are now using employment contracts to force workers to give up these protections.

‘Take It or Leave It’ Contracts

Corporations are forcing employees to sign away their rights by offering “take it or leave it” contracts that include clauses exempting employees from basic labor protections. Known as coercive waivers, these provisions include:

Forced arbitration agreements: Provisions that waive a person’s right to a public trial. Instead, workers must argue their claim in arbitration—like a private court—where there is no jury and the judge is paid by the employer. Workers win less frequently and receive lower awards when forced into private arbitration. Forced arbitration agreements often include class and collective action waivers that require workers to file claims individually and not collectively with coworkers.

Non-compete agreements: Clauses that prevent workers from working for “competitor” companies during or after their current employment. These contracts typically restrict workers through time, industry, and/or geography, often making it impossible for someone to leave for a better job.

Non-disclosure agreements: Provision that prevents workers from discussing any workplace issues they experienced during their employment, including wage theft, discrimination, and harassment. Workers could be sued by the company if they talk about the problems there, which lets employers get away with bad behavior.

Training Repayment Agreement Provisions (TRAP): Clauses that require an employee to work for an employer for a specific amount of time after being trained for a job. If the employee leaves before the period listed in the contract, they need to pay back the employer for the training they received, even if minimal on-the-job or orientation-type training. Like non-competes, TRAPs deter workers from leaving for a better job.

Independent contractor waivers: Contracts that label a worker an independent contractor when they should be considered an employee, thereby excluding them from nearly all labor and employment protections. You can learn more about NELP’s work on rights for workers who are misclassified as independent contractors here.

Corporate Power Must Be Reined In

NELP supports initiatives and policies that end or limit the legal loopholes that corporations are using to opt out of worker protections, including:

Shoring up public enforcement: Public agencies, including the U.S. Department of Labor and state labor agencies, can enforce worker protections regardless of loopholes found in employment contracts. Through our strategic enforcement partnership programs, we help agencies build relationships with workers organizing to hold their employers accountable.

Supporting legislation that bans or limits the use of coercive waivers: We support legislation at all levels of government that bans or limits the use of coercive waivers. This includes the Forced Arbitration Injustice Repeal (FAIR Act), which would ban the use of forced arbitration in employment and civil rights disputes. We also support the Workforce Mobility Act, which would eliminate non-competes for most workers.

Supporting PAGA legislation: Short for Private Attorney General’s Act, PAGA laws allow individual employees to file lawsuits on behalf of a state, thereby getting around forced arbitration provisions. The law has been used successfully in California for some time, and a campaign to pass a similar law in New York State is ongoing.

Supporting litigation that challenges the overly broad interpretation of the Federal Arbitration Act: The Federal Arbitration Act was not intended to force workers into private arbitration when their rights are violated. We support litigation arguing that workers should be exempt from laws that allow forced arbitration in contracts.

Supporting anti-trust initiatives: The use of coercive waivers gives low-road employers an advantage within our economic system. We support federal agencies that are working to level the playing field for employers who are trying to do the right thing but cannot compete with low-road corporations.