A noncompetition agreement can prevent a person from seeking more lucrative and satisfying employment. However, these consequential clauses may have been contained on one form or box that was checked without meaningful review when employment contracts were signed. A federal bill may help some workers but has serious drawbacks.
Noncompetition agreements were traditionally used with high-echelon employees to prevent them from revealing or using confidential work-related information. However, almost 20 percent of employers are using non-competes to restrict a broader ranger of employees.
These have covered nurses, health-care aides, fast-food workers, customer services representatives and receptionists. In fact, the Jimmy John’s franchise attempted to restrict employees from working for any business that earns 10 percent of its revenue by selling designated sandwiches within three miles of any Jimmy John’s in the United States.
Senator Marco Rubio (R. Fla.) introduced a Freedom to Compete Act that would ban the use of non-compete agreements for certain lower-wage workers. It would limit federal protections to workers eligible for overtime. They could file actions for legal and equitable relief.
The bill leaves out managers and other mid-level workers who are excluded from overtime wages by making over $23,660 per year. Although, workers may be entitled to begin legal actions, the mere existence of a non-compete clause can intimidate workers from looking for a new job by fear of being sued. Other employers may also withdraw offers if they learn about the existence of a non-competition clause.
This bill also does not contain sanctions or punishment that can be imposed to punish or deter violations. In 2018, however, Senator Chris Murphy (D. Conn.) introduced the Workforce Mobility Act which would ban non-competition agreements for most workers and impose penalties up to $5,000 per violation along with punitive damages.
These agreements may keep workers from looking for new and more profitable employment or keep them from continuing their profession after they are terminated. An attorney can help review and negotiate these agreements and, if necessary try to overturn them.