New Senate bill would abolish non-competes for low-wage workers

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Jimmy John’s aside, is that really a thing? The use of non-compete agreements for employees making less than $15 an hour?

The Mobility and Opportunity for Vulnerable Employees (MOVE) Act

Well, according to a press release from Senator Chris Murphy (D-CT), “research” shows that somewhere between 8-15% of low-wage workers have to sign non-competition agreements as a condition of employment. So, Senator Murphy, along with U.S. Senator Al Franken (D-Minn.), introduced the Mobility and Opportunity for Vulnerable Employees (MOVE) Act in the Senate. The MOVE Act would amend the Fair Labor Standards Act to ban the use of non-compete agreements for employees making less than $15 an hour, $31,200 per year, or the minimum wage in the employee’s municipality, and will require employers to notify prospective employees that they may be asked to sign a non-compete agreement.

A “shaming exercise” for employers

Let’s go back to the Murphy statistics.

If 8-15% of low-wage workers are affected by non-compete agreements, that means that — carry the one — about 9 out of 10 low-wage workers aren’t encumbered by this form of restrictive covenant. And, how many of those 1 in 10 have had their former employer seek to enforce a non-compete? Indeed, I imagine that most do not pose a competitive threat. Plus, courts disfavor enforcement of restrictive covenants where the employee would be precluded from making a living or the employer lacks a legitimate business interest in enforcement. So, we’re talking about a really small number of employees truly affected by this so-called “practice.”

Then, why break out the legislative handcuffs to police a workplace issue that really needs no policing? According to this article from Bloomberg Law’s Chris Opfer, Senator Murphy described the MOVE Act as a “shaming exercise,” to bring attention to the issue.

Your tax dollars at work, folks.

That said, 20+ states have laws forbidding employers from demanding social media passwords from employees. Not so much a shaming exercise, as a solution in search of a problem, with not a scintilla of supporting empirical research.

At least the MOVE Act is based on “research.”

Image Credit: “Ecrivains consult – Texte 4 mains” by Jérôme Dessommes – ÉCRIVAINS CONSULT® – ÉCRIVAINS CONSULT®. Licensed under CC0 via Wikimedia Commons.

 

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