WeWork to Scale Back Non-Competes After Settlement With New York Attorney General

Co-working company WeWork Cos. is getting rid of or limiting its non-compete clauses for employees, according to an announcement of a settlement from the New York Attorney General.
For years, New York-based WeWork made all its employeesfrom executives to the cleaning staff who maintain its shared-office workspacessign non-compete agreements, which prevent workers from taking jobs with competitors soon after leaving the company. An exception was made for employees in California, where the agreements are illegal. As a result of the settlement, WeWork is eliminating non-compete agreements for 1,400 of its rank-and file employees, according to the attorney general’s office, including cleaners, baristas and executive assistants. It also said another 1,800 employees will have their non-compete agreements reduced in scope, including duration and the geographic area in which the agreements apply. 
The New York attorney general was investigating WeWork's use of non-compete agreements in late 2016. Last year, as WeWork faced legal challenges about labor violations from former employees, a company executive said she thought it was appropriate for all employees to sign agreements like this. "We believe our secret sauce is in our staff and in our employees and especially on the community front," said the executive, Jen Berrent. "Our people are our soul.”
In a statement, New York Attorney General Barbara Underwood said that the move would be good for WeWork employees, and that “workers should be able to take a new job without living in fear of a lawsuit from their former employer.” 

Dominic McMullan, a spokesman for WeWork, said no money was exchanged in the settlement and that WeWork had begun the process of revamping its non-compete agreements about one year before the attorney general began investigating the issue. “We welcomed the input of the attorneys general,” WeWork said in an emailed statement. “We are pleased to confirm that we now have updated documents developed collaboratively”

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