Mar 17, 2021 - Economy

Missing piece in Silicon Valley exodus talk: labor laws

Illustration of a briefcase with a missing puzzle piece

Illustration: Eniola Odetunde/Axios

The past year’s work-from-anywhere circumstances have turbocharged efforts to start and grow tech hubs outside of Silicon Valley—but one area getting little attention is employment law.

Why it matters: With Silicon Valley homogeneity not changing very quickly, some are hopeful that emerging tech centers elsewhere will be more inclusive for workers. But this aspiration could be easily thwarted if local tech workers lack supportive laws.

The big picture: Labor laws regarding discrimination, parental leave, worker organizing, and non-compete agreements vary from state to state — and even from city to city.

  • California’s long-standing policy of not enforcing non-competes is often credited for making it possible for Silicon Valley’s tech workers to jump to newer and more cutting-edge companies and even start their own. In states where these clauses are popular and legal, employers can make it harder for workers to take their talents to competitors or hatch new startups quickly.
  • Non-compete agreements can be especially challenging for workers without the resources to not work in between jobs.

According to Oxfam’s most recent report on the best states for workers, with a focus on gender and family discrimination protections:

  • While California ranks at the top as far as worker protections, Florida is at #36 and Texas at #45. The latter two states, which have recently garnered the most headlines about a tech exodus from Silicon Valley, provide no paid parental leave, unlike California's eight weeks at 60-70% of pay. Federal law, however, lets most employees take up to 12 weeks of unpaid leave.
  • California, meanwhile, has continued to bolster its anti-discrimination rules. In 2018, it added explicit protections for entrepreneurs against harassment from investors, and enabled workers to speak about workplace sexual harassment even if they've signed non-disclosure agreements. Former Pinterest employee Ifeoma Ozoma recently helped draft a new state bill that would expand the latter to all forms of workplace discrimination.
  • States like New York, Massachusetts, and Washington, which have long had significant local tech hubs, rank within the top nine spots. However, states with younger tech industries like Colorado and Utah come in at #12 and #23, respectively.

Yes, but: Having employee protections far from guarantees employers will be deterred from discriminating against certain workers.

  • Numerous Silicon Valley companies, big and small, have faced discrimination lawsuits in just in the last few years, including Google, Uber, and Oracle.
  • Companies have also relied on independent contractors or third-party staffing agencies to cut down on employment costs, and have often siloed workers of color into these positions instead of offering them full-time employment.
  • The practice also makes it harder for these workers to voice complaints, especially when they’re prohibited from collective bargaining.

Even Atlanta, which has established itself as a bonafide tech hub especially for Black techies, still faces its share of issues.

  • Recent reports about racism and sexism at email company Atlanta-based Mailchimp highlights ongoing challenges. Notably, only 17.6% of the company's employees are Black, despite Atlanta having a population that is more than 50% Black, according to Business Insider.

The bottom line: Exporting Silicon Valley's companies and workplace practices to other cities could easily include some of its worst instincts—and without strong local laws, tech workers will face many of the same issues in those places too.

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