Finance

Bill would ban noncompete clauses for low-wage workers

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Two Democratic senators said Tuesday they will introduce legislation banning noncompete contracts for low-wage workers.

The bill from Sens. Chris Murphy (D-Conn.) and Al Franken (D-Minn.) would ban noncompete clauses for workers making less than $15 an hour or $31,200 annually, or the minimum wage in the employee’s municipality. 

{mosads}The move follows reports the Jimmy John’s sandwich shops requires some of its low-wage workers to sign two-year noncompete agreements prohibiting them from working at retail stores that make at least 10 percent of their sales from sandwiches.

The legislation is dubbed the “Mobility and Opportunity for Vulnerable Employees (MOVE) Act” and is also supported by the National Employment Law Project.

In October 2014, 35 House Democrats sent a letter to Federal Trade Commission Chairwoman Edith Ramirez and Labor Secretary Thomas Perez urging them to investigate the issue.

“Non-competition agreements may sometimes make sense for well-compensated core company leadership, who are privy to company secrets and strategies,” lawmakers wrote in the letter, which was circulated by Reps. Linda Sánchez (D-Calif.) and Joseph Crowley (D-N.Y.). “However, applying them to a company’s entire workforce looks more like bullying under color of law, as well as a violation of labor rights.”

Tags Al Franken Chris Murphy income inequality Jimmy John's Minimum wage

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