When Chelsea Rutter’s daycare center closed at the start of the pandemic, she watched the families of her students scramble to find new childcare. Now uncertain of his own business, Rutter agreed to care for young children at his home in Seattle.
Editing seemed like the perfect solution. The children would be under the care of a teacher they knew and trusted, while Rutter would have some job security amid the economic downturn. There was only one possible problem.
According to Rutter, if any of the families wanted to hire her as a nanny, she would have to pay a $5,000 penalty to her employer, Bright Horizons, one of the largest for-profit childcare providers in the country.
Parents and guardians fill out a lot of forms when enrolling a child in day care. In at least some versions of Bright Horizons’ informed consent form, they must agree to pay the company if they catch a worker as illegal. If the family chooses to hire a worker “within 6 months of leaving” Bright Horizons, a “placement fee” of $5,000 applies.
Rutter has decided to work for families anyway, and he doesn’t believe Bright Horizons is after them for money. But he was sure the company was using this clause to prevent workers from getting more attractive job offers.
It is now suing Bright Horizons in a proposed class action lawsuit in Washington state court, arguing that the deal unlawfully suppresses workers’ wages.
“You have to compete,” said Rutter, 30, who left Bright Horizons last year and now works as a freelance writer and editor. “If you do not want [workers] to go, then you have to pay to keep them. You can’t hold them by creating a penalty barrier in the middle.”
Bright Horizons did not respond to requests for comment. It’s unclear how widely the company uses the agreement, but that agreement appears to be standard in the company’s forms for backup care that families use when their regular childcare arrangements are over.
Rutter said the point of the clause became clear as COVID-19 upset the country’s childcare system, increasing demand for home caregivers and giving caregivers a new advantage. In his lawsuit, he alleges that the poaching fee kept wages at Bright Horizons lower than it would have otherwise been, violating Washington state’s new ban on non-compete agreements.
The law, which came into force in 2020, makes such provisions invalid and unenforceable when applied to salaried workers. less than roughly $100,000 in a year. It also allows workers to seek remedies in court if they believe an employer has violated it.
Non-compete and non-poaching agreements have a long history in the United States. Reconstruction In the South, some state laws prohibited growers from keeping workers apart to keep wages low in the new post-slavery labor market. Regulators have recently targeted such deals because of their potential to limit workers’ mobility.
In 2019, four fast-food chains – Dunkin’, Arby’s, Five Guys and Little Caesars – agreed to stop using their no-poaching agreements in an agreement with 14 states. Each company required franchisees not to hire employees from other franchises under the same brand.
Washington state has been one of the most aggressive in pursuing non-compete and anti-poaching agreements. A recent study by economists that looked at the state’s attorney general’s enforcement campaign found that wages paid to low-wage workers rose more than 3% when franchisees lifted trespass provisions.
The Bright Horizons contract functions a little differently in that the competing employers are the company’s own clients and not other daycare centers. Childcare workers develop close relationships with students and their parents. Hiring a nanny or even a part-time babysitter is an emotional decision for families. Once they find the right caregiver, they are reluctant to part ways.
Rutter’s attorney, David Seligman, whose nonprofit company Towards Justice is suing Bright Horizons, said families of Bright Horizons students will be the ones most likely to offer them new jobs. He argued that it didn’t matter whether the company routinely enforced the clause – he simply argued that its very existence would discourage job offers, thereby placing a cap on workers’ salary.
“One of the most important levers a worker has is the ability to work elsewhere,” Seligman said. “Even the threat of doing so gives workers the bargaining power to get better wages and decent working conditions.”
Recent data shows employers are facing increasing competition for childcare workers. While U.S. employment has overall surpassed pre-pandemic levels, there are still fewer childcare workers now than in early 2020. seems to have left the field For more lucrative options. The industry is notoriously low paid and the average salary in the US $13 an hourAccording to the Bureau of Labor Statistics.
Bright Horizons said in a statement. latest annual report He said “increased competition” for employees, especially teaching staff, could slow growth and negatively affect enrollment in centers. “We may continue to have difficulties in attracting, recruiting and retaining qualified teachers due to tight workforce pools,” the company said.
Rutter said that when he left Bright Horizons, he earned a salary of around $20 an hour, or the equivalent of $42,000 a year – an amount that doesn’t go too far in Seattle, which is famous for its high cost of living. (Rutter now lives in Port Angeles, Washington.)
Rutter says Bright Horizons offered him a position at a daycare center that remains open in a different part of town while its center is closed. But he said he was reluctant to work there, as the commute is further away and parking costs would reduce his earnings. When it reopened in 2020, it returned to its regular headquarters and left the company the following year.
Bright Horizons owns full-service childcare centers, but also contracts with employers to provide backup care for their employees. The company says it has about 650 childcare centers in North America. (Bright Horizons provided backup maintenance to HuffPost employees, including this reporter, while the site was owned by Verizon.)
HuffPost does not know of any instances where Bright Horizons requested $5,000 from a family for poaching a worker. Rutter said he first heard about the policy during employee orientation after he was hired and remembers it was briefly mentioned.
Agreements restricting competition for workers have come under intense scrutiny over the past decade, particularly by Democratic officials. Last year, President Joe Biden signed an executive order encouraging the Federal Trade Commission to pursue clauses that “may unfairly limit worker mobility.” These efforts have been spurred by outrageous examples of non-compete. Jimmy John’swhere some stores used a clause prohibiting workers from leaving to work at a competing sandwich shop.
Employers often defend such agreements on the grounds that they must protect their investment in workers’ training. But Rutter claims in his lawsuit that Bright Horizons “invested significantly less than $5,000 per childcare worker” in such costs, and says workers “go through self-guided, standardized training modules.”
Rutter seeks compensation from workers like himself, among other things, to cover the higher wages he believes they would have earned had it not been for such agreements. In this case, Rutter said, childcare workers are not paid close to their value.
“There was that brief moment in the early days of the pandemic where many teachers were saying, ‘Wow, they’re finally going to see the value of what we’ve done and everything will be different,'” he said. “It didn’t turn out as we all hoped”