Amazon to remove non-compete clause from contracts for hourly workers

Amazon is to remove a “non-compete” clause from its employment contracts for US workers paid by the hour after criticism that it is unreasonable to prevent such employees from finding other work.

A company spokeswoman confirmed to the Guardian that the clause would be cut.

“That clause hasn’t been applied to hourly associates, and we’re removing it,” she said.

In the past, Amazon has required its US employees, including seasonal workers, to sign non-compete contracts which cover a period of more than 18 months after the employee has separated with the company, the Verge reported on Thursday.

According to a contract obtained by the Verge, Amazon workers that signed it pledged not to “engage in or support the development, manufacture, marketing, or sale of any product or service that competes or is intended to compete with any product or service sold, offered, or otherwise provided by Amazon (or intended to be sold, offered, or otherwise provided by Amazon in the future) that employee worked on or supported, or about which employee obtained or received confidential information”.

Typically, non-compete contracts are part of the hiring process for white-collar, highly skilled employees privy to trade secrets.

“How technical is it to go and box stuff every day and send it off?” Ray Lee, a seasonal Amazon worker, told the Verge.

If Amazon were to enforce these non-compete clauses among its hourly employees, it could limit their ability to find employment elsewhere.

Low-wage workers, including Amazon’s seasonal hourly workers, in need of jobs were not likely to negotiate the terms of a contract and object to a non-compete clause, Charlotte Garden, a law professor at Seattle University School of Law, told the Verge, which first reported the existence of such clauses.

Even if the clause were to be unenforceable, as some experts predict, workers earning $10 to $12 an hour would not be able to afford to pay for legal fees to fight the company in court.

Amazon’s definition of competition is highly inclusive, as the company competes in many fields.

“Our businesses are rapidly evolving and intensely competitive,” the company said in its last annual report. It went on to add that it has six different types of competitors – among them physical retailers, publishers, e-commerce retailers, and media companies.

Then there are the companies that handle payment processing, information storage or computing storage.

Amazon’s contract is also technically applicable “worldwide”.

“Employee further recognizes that the geographic areas for many of Amazon’s products and services … are extremely broad and in many cases worldwide,” the contract states.

Amazon employs over 88,000 workers worldwide. The company would not disclose the breakdown of its staff by geography or hourly pay and salary. No UK employment contracts for hourly workers contained such non-compete clauses.

Amazon further required laid-off employees to reaffirm their non-compete contracts in order to receive severance, reported the Verge.