The clerks at Check Into Cash, a national chain that offers check cashing and payday loans, are paid close to minimum wage to do tasks like enter customers’ information into a computer. The job does not require much training. Some employees lack a high school diploma. Nevertheless, many must sign a contract that prohibits them from working at competing companies.
Legislation to restrict or ban these so-called noncompete agreements has been enacted in several states, but the contracts remain widespread even among low-wage workers. Attorneys general are also now getting involved, adding legal muscle to the political and economic debate.
On Wednesday, the Illinois attorney general sued Check Into Cash, accusing the company of violating a state law prohibiting noncompete agreements for workers making less than $13 an hour. The lawsuit, the first since the law was passed last year, demands that the company remove the clause. Check Into Cash has about 250 employees in Illinois and about 3,000 nationwide.
“I want to ensure that Illinois workers have the freedom to change jobs and seek better wages,” said the Illinois attorney general, Lisa Madigan, a Democrat. “And what we have found is that the use of unfair noncompete agreements have scared a lot of low-income workers into staying in low-paying jobs when they could, based on their experience, get better pay.”