A group of senators has proposed a bill that, if passed into law, would bar companies from requiring low wage workers to sign noncompete agreements. The proposed law would bar such an agreement for workers paid $15 or less per hour. Because this is proposed as a federal law, if it were to be adopted it would apply to virtually all low wage employees nationwide.
This proposal appears to respond to news reports over the past year or so in which companies have been accused of requiring even their lowest paid workers to sign noncompete agreements that would bar the workers from going to work for a competitor. So long as those situations continue to be reported in the news, there will be potential support for this sort of law.
There is a big difference between filing a proposed bill and having it adopted into law – and it is not clear that there is enough support for this bill to move forward at this time. But such a law, if passed, would certainly require many employers to reevaluate their strategies for protecting customer relationships.
The analysis set forth in this article is provided for general understanding only and should not be considered legal advice. Counsel should be consulted regarding the use of noncompetes or other types of post-employment restrictions in specific situations.