Employees

New Bill Seeks to Ban Noncompete Clauses for Low-Wage Workers

New Bill Seeks to Ban Noncompete Clauses for Low-Wage Workers
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Two senators are trying to help fast-food workers shackled to employers due to noncompete agreements.

On Wednesday, Senators Al Franken (D-Minn.) and Chris Murphy (D-Conn.) introduced the Mobility and Opportunity for Vulnerable Employees Act, a bill that would ban noncompetition agreements for workers making less than $15 per hour or $31,200 annually (or the minimum wage in an employee's municipality).

“Noncompete agreements hidden in low-wage worker contracts deliberately trap these workers in low-paying jobs – and that’s unacceptable,” Sen. Murphy said in a statement. “I worked hard on this bill because I believe that if you’re making less than $15-an-hour, the government has a moral duty to stop companies from exploiting your hard work by preventing you from using your skills and experience to work your way up.”

Related: 5 Uncomfortable Questions Asked at McDonald's Company Shareholders' Meeting

Concern regarding the practice of companies forcing low-wage workers to refrain from working for the competition spiked last year after a Jimmy John's employment agreement surfaced, revealing an intense noncompete agreement. The contract required employees – even those fired -- to refrain from working for any company that makes more than 10 percent of its revenue from selling sandwiches for two years after leaving Jimmy John's. The agreement played a role in a class-action lawsuit against the chain, accusing Jimmy John's and a franchisee of systematic wage theft.

While enforcement of non-competition agreements doesn't make much sense for restaurant chains, due to the high turnover rate and the fact that many workers are employed at several restaurants at a time, a recent study found that the practice of having employees singing non-competition agreements is not uncommon. While the study found the agreements to be more common in higher-skilled professions, they also affect workers in more traditionally lower-skilled and lower paying industries as well, with 12 percent of the total workforce currently bound by a noncompete agreement. 

Related: How Au Bon Pain's Executive Chef Puts Her Line Cook Experience to Good Use

Edition: December 2016

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