Yoga Enterprise

Noncompete Agreements Are Everywhere, Even Neighborhood Yoga Studios

People do yoga on the beach in Miami Beach, Florida on March 23. // AFP via Getty Images, Chandan Khanna

Yoga is a source of calm and healing for many.

Those who teach do so because they love the practice and often find it spiritually rewarding.

But it’s also a business. And sometimes a cutthroat.

When Justine Cohen opened the Down Under School of Yoga in Boston 18 years ago, poaching was rampant, she says.

“Teachers come in with clipboards, collect names and then literally open up or next door,” says Cohen.

Soon after, she began using non-compete agreements to restrict where her teachers were allowed to teach, either during or after her tenure Down Under. She saw the agreements as a way of professionalizing an unregulated industry. They were part of her employment contracts until this spring when she faced a backlash.

An open letter shed light on non-compete obligations

In May, more than two dozen former teachers from the Down Under School of Yoga posted an open letter on Facebook and Instagram. It described the limits the studio’s contract placed on teachers and restricted them from teaching at other yoga studios, fitness centers, and private homes within miles of the three locations of Down Under while they were employed and a year long left the studio.

“For many of us, this meant that leaving Down Under for fear of non-compete agreements threatened our existence as yoga teachers,” the letter said. “This has caused significant pain and distress to dozens of former Down Under yoga teachers, many who were forced to teach yoga after leaving Down Under to make ends meet.”

Einat Peled-Katz, one of the teachers who signed the open letter, says yoga teachers may be particularly vulnerable to damage from non-competitions because they don’t view their practice as a business. She says that they often hesitate talk about fair treatment and compensation.

“It makes it feel like I don’t want to be the one causing problems,” she says. “I should be able to make peace within myself and move on.”

Non-compete agreements can also be a headache for employers

The White House estimates tens of millions of workers are subject to non-compete obligations, even in states like California where they are banned. President Biden has argued that they affect workers’ ability to find better jobs and higher wages. They can also harm employers.

When Callie and Hagana Kim opened Tuck Barre & Yoga in Philadelphia in 2017, they immediately found that almost every teacher they wanted to hire had competition.

This was especially true for Barre, a workout that includes ballet, yoga, and Pilates, but they also struggled with hiring yoga teachers. Since then they have trained most of their own teachers.

Enforceable or not, non-compete provisions serve as a deterrent

The Kims are both lawyers. Callie used to negotiate non-compete agreements for corporate executives, the kind of highly paid people who could reveal company secrets to a competitor.

But the non-compete bans they encountered in the yoga and barre world were too broad and ultimately not enforceable.

“The real crux of the problem is you have to have a legitimate business interest to protect,” says Callie Kim. “It can’t be easy that you don’t want competitors.”

Shulman Rogers’ attorney Joy Einstein sees a place for non-competitions in fitness. Let’s say you’ve invested a lot in your studio’s reputation, she says. Storming someone and doing all of those investments in a new studio would be a big blow.

But Cory Sterling, founder of the law firm Conscious Counsel, says that 80% of the non-competitors he sees in yoga and other wellness practices would not stand up in court if they ever got there.

“What I want to say to all teachers is that non-competitions are usually used as scare tactics,” says Sterling.

A yoga studio changes its practice

In Boston, faced with an open letter from her former teachers, Down Under owner Cohen responded with an apology and confirmation that her employment contract “feels punitive, excessive and contains clauses that scare people.”

She wrote to ex-teachers who were still bound by the non-compete clause, telling them: It’s gone.

Then she turned to her current teachers to rewrite the contract. They developed a new system in which the teachers determine their own commitment to the studio. If you only want to teach Down Under, you have the opportunity to earn more money.

“Ninety-five percent of them actually picked the most committed level,” says Cohen, adding that with the new system, they no longer need non-compete obligations. This chapter is over.

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