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Do We Really Need a Law to Ban Non-Competes For Hourly Workers?
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By Eric B. Meyer
Here’s a news flash: A new U.S. Senate bill would abolish non-competes for low-wage workers.
The Jimmy John’s thing aside, is that really an issue? The use of non-compete agreements for employees making less than $15 an hour?
Well, it’s called The Mobility and Opportunity for Vulnerable Employees (MOVE) Act.
According to a press release from Sen. Chris Murphy, D-CT, “research” shows that somewhere between 8-15 percent of low-wage workers have to sign non-competition agreements as a condition of employment. So, Sen. 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.
Let’s go back to Sen. Murphy’s statistics.
If 8-15 percent of low-wage workers are affected by non-compete agreements, that means that means about 9 out of 10 low-wage workers aren’t encumbered by this form of restrictive covenant. And, how many of those one 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, the 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 an article from Bloomberg Law’s Chris Opfer, Sen. Murphy described the MOVE Act as a “shaming exercise,” to bring attention to the issue.
Your tax dollars at work, folks.
That said, 20 plus states have laws forbidding employers from demanding social media passwords from employees. That’s 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.”
This was originally published on Eric B. Meyer’s blog, The Employer Handbook.