Economy

Amazon Gets Rid Of Strict Non-Compete Clause For Contract And Temporary Employees

CREDIT: AP

Amazon swiftly reversed its contract practices for its largely manual labor force by rescinding a controversial and far-reaching non-compete clause that barred temporary and contract workers from working at companies that even remotely compete with the online retailer.

An Amazon spokesperson told the Guardian the company was rescinding the non-compete clause amid public criticism of the policy: “That clause hasn’t been applied to hourly associates, and we’re removing it.”

The move came after the Verge published an exclusive account regarding Amazon’s employment contract terms, which required warehouse employees to forfeit working at companies that “directly or indirectly” competed with Amazon’s goods or services for 18 months after their temporary contracts ended.

Amazon had similarly stringent yet broad requirements for terminated permanent employees, who had to agree to non-compete agreements to get severance pay.

Amazon’s business is heavily contingent on its manual labor workforce, which can make about $12 an hour, in its distribution warehouses worldwide. But the company’s vague non-compete agreement made it difficult for temporary employees to find work elsewhere.

Verge reported how often seasonal and contracted warehouse workers had to think twice before applying for similar distribution positions at companies such as Walmart, Target or Costco. Former employees also had to run the jobs they applied for past Amazon to get permission and make sure it didn’t run afoul of the non-compete agreement.

Amazon has frequently found itself in labor controversies. The company was investigated by the National Labor Relations Board last year after an employee said he was fired after raising security concerns. In December, the company’s warehouse workers in Germany went on strike again during the holiday season to protest low wages and unsafe work conditions. Amazon was also in the middle of a wage theft suit the Supreme Court dismissed last year involving the temp agency the company uses to staff its warehouses.

But Amazon isn’t alone when it comes to labor practice disputes involving contract workers. Key players in the tech industry — Uber, Facebook and Google — have also had run-ins regarding pay, benefits and hours.

Drivers for ride-hailing services Lyft and Uber filed lawsuits against the companies fighting for full-employee status — complete with benefits such as minimum wage, expense reimbursement for gas and car maintenance costs under California law — rather than independent contractors, who aren’t entitled to such perks.

In the same vein, Facebook recently gave a pay raise to its contracted bus drivers who shuttle employees to and from Silicon Valley after the drivers threatened to unionize to address pay and work hours complaints. In February, Facebook inked a deal with drivers to raise their hourly wages from $18 to $24.50 and also places limits on work schedules to six-hours a day for workers who can’t split shifts. Those who do split shifts also got a pay increase.

Following a national protest, Google hired hundreds of security guard contractors as full-time employees, who stand to get the same perks and benefits as other Googlers. Security guards backed by the Service Employees International Union protested in front of Apple stores the day the iPhone 6 hit stores in 2014 to raise awareness of the growing economic disparity between tech workers and service workers even when they work for the same company.

Moreover, Google is being sued for not paying a tech contractor who earned overtime and wrongly classifying him as a freelancer. Jacob McPherson, who worked as a Google Play site merchandiser in New York, asserts that Google refused to pay him for working more than a 30-hour week even though the work he was tasked required him to work more than 40 hours a week.