Seattle-area coffee chain Mercurys Coffee has agreed to void hundreds of non-compete agreements that staff members, including hourly baristas, were required to sign for employment.
A recent Washington State Attorney General’s Office investigation found that Mercurys had approximately 120 people currently in its employment throughout eight retail locations, and about 700 over the past five years.
All those employees were required to sign an overreaching non-compete agreement that prohibited them from working at any coffee shop within 10 miles of a Mercurys Coffee location for a period of 18 months after leaving the company. According to the AG’s calculation, the agreement would require employees of Mercurys Redmond location, for example, to drive some 40 minutes before they could find another coffee shop in which to work.
The Attorney General’s initial complaint also uncovered the fact that Mercurys Coffee took legal action against numerous employees to enforce these agreements, including a store manager making $17 per hour who left Mercurys for another coffee shop 1.5 miles away. The company also threatened to sue another former employee who left to work at a Starbucks, the complaint states.
According to a copy of the non-compete agreement shown in court documents, the agreement also required former employees to show prospective new employers a copy of the agreement for a period 24 months after their time with Mercurys.
“Non-compete agreements targeting low-wage, hourly employees give companies an unfair advantage at the expense of workers,” Washington State Attorney General Bob Ferguson said in an announcement of the case settlement. “Any company that makes their employees sign unfair contracts should expect to hear from my office. A coffee shop barista, or any low-wage worker for that matter, should not fear retaliation just for moving to another job that’s better for them.”
As part of the settlement, Mercurys has agreed to void existing non-compete agreements, while also reimbursing the state $50,000 for the investigation. The company has not accepted any liability or conceded any violation of the law, according to the settlement terms.
[Editor’s note. This story has been updated. The original version incorrectly stated that the investigation was led by King Country representatives, when it was in fact led by the Washington State Attorney General’s office.]