A King County coffee chain must void restrictive agreements it required all employees to sign following an investigation by the Washington State Attorney General’s Office.
Mercury’s Coffee had all of their employees, some hourly and low-income, sign restrictive non-compete agreements, according to Attorney General Bob Furgeson.
These agreements prevented employees from working at any coffee shop within 10 miles of a Mercury's Coffee location. The requirement also extended for eighteen months after the person left the company, essentially preventing someone from working at most coffee shops in King County.
Using one location as an example in their investigation, the AG’s Office said a barista working at Mercurys’ Redmond location would have to drive at least 40 minutes to find another coffee shop where they would be allowed to work.
Mercury’s Coffee filed several lawsuits against workers who found employment at other coffee shops, the AG found.
According to Ferguson’s complaint, Mercurys’ non-compete agreements violated the Washington Consumer Protection Act, which prohibits companies from engaging in “unfair methods of competition.”
Non-compete agreements limit low-wage workers’ options, mobility and ability to advocate for better pay and working conditions. This gives the employer an unfair advantage in competing for their labor — one of many reasons wages have stagnated even as employment rates have gone up, Ferguson said.
Mercury’s Coffee has about 120 employees in eight locations in King County. Over the last five years, the company has employed over 700 people, all or most of whom had to sign the non-compete agreement, Ferguson said.
Mercury’s Coffee was also asked to pay $50,000 in attorney fees.