On December 1, 2022, Terrell Marshall Law Group and Towards Justice filed a lawsuit on behalf of current and former childcare workers at Bright Horizons childcare centers in Washington. The suit alleges that the company imposes a $5,000 penalty on families who hire Bright Horizons employees to work directly for the family (typically as a nanny) in order to keep their employees trapped in low-paying positions.
Bright Horizon’s Noncompetition Covenant
Bright Horizons, one of the largest childcare center chains in the United States, employs over 16,000 individuals across the country at more than 650 childcare centers. Approximately 114,000 children and their families rely on Bright Horizons and their employees for childcare services.
Bright Horizons includes the $5,000 noncompetition covenant in the contracts that families must sign when they first enroll a child at a Bright Horizons center. The covenant, labeled as a “placement fee,” applies any time a family hires an employee within six months of the employee leaving Bright Horizons. Employees are not informed of this covenant before being hired. Only after an employee is hired does Bright Horizons inform them of the covenant, and then they are told that it is a term and condition of employment.
Noncompetition Covenants Harm Employees and Families
Most Bright Horizons employees are paid barely above minimum wage. As employees gain more experience at childcare centers, they become more valuable to both the business and to families because of their expertise, but their wages do not keep pace with their value. The $5,000 fee that Bright Horizons demands from families acts as a barrier for employees to find better-paying positions, limits employee bargaining power for better pay, and effectively traps them in a low-paying position. Additionally, the fee prevents families from hiring childcare workers with whom their children are already familiar.
This covenant became especially burdensome in March 2020 when the COVID-19 pandemic closed many childcare centers. Employees, furloughed and out of work, began offering childcare services to families they knew through Bright Horizons, sometimes out of their own homes. The arrangement was ideal for the pandemic: employees could continue to make money, and families once again had reliable childcare. But Bright Horizons used its noncompetition covenant and the threat of its enforcement to prevent employees from remaining in jobs with families.
David Seligman, Executive Director of Towards Justice, stated that “Bright Horizon’s covenant not to compete hurts both childcare workers and families desperate for affordable care. Bright Horizons can pay workers less than they would have to if they were competing fairly. The non-compete helps no one except Bright Horizons’ bottom line.”
TMLG and Towards Justice Fight for Employees
The complaint, filed in Washington State Superior Court, alleges that Bright Horizons’ $5,000 “placement fee” violates Washington’s non-competition law. Terrell Marshall Law Group and Towards Justice argue that without the threat of the fee, employees would not be trapped in a low-paying position, and Bright Horizons would have to pay its employees more in order to keep them.
Chelsea Rutter, a former employee of Bright Horizons, is representing the class. Elizabeth Adams, a member of Terrell Marshall Law Group, stated that “Washington law provides robust protections for workers to help address the inherent differences in bargaining power between large corporations and individual employees, and lawsuits like this one are how employees can enforce those protections. Ms. Rutter’s willingness to step forward to represent hundreds of childcare workers in Washington will help all employees in this state by showing corporations that they will be held accountable to the law.”