ALBANY – Non-compete employment clauses would be barred for certain lower wage workers in New York under legislation being introduced by state Attorney General Eric Schneiderman.
The proposal comes after the state settled cases with several companies, including sandwich franchise company Jimmy John’s, which earlier this year stopped requiring employees in New York to sign a contract agreeing not to work for a competitor for a certain amount of time after leaving the company.
Legislation has been proposed over the recent years in both houses of the Legislature, though an agreed-to bill was never enacted. Schneiderman said he will offer up a new plan for the next legislative session that begins in January.
Critics say the non-compete clauses end up depressing wages and makes some workers think twice about leaving a company for fear of not being able to get a job with a possible competitor of their current employer.
The Schneiderman bill will prohibit non-compete agreements to workers below a certain threshold as established in state labor law, a level that is currently about $900 per week. It would also ban such contracts that go beyond a need to protect a company’s trade secrets or other such confidential information, and require that companies provide such non-compete agreements to people before they are offered a job.
The measure would also make it easier for victims of non-compete agreement violations to sue their current or former employers and requires companies to pay a higher wage for workers who sign such clauses.
The legislative plan comes after the White House earlier this year raised concerns about the impact non-compete agreements have on the nation’s economy and workforce.
“Workers should be able to get a new job and improve their lives without being afraid of being sued by their current or former employer,’’ Schneiderman said in announcing his plan this afternoon.
Besides fast food retailer Jimmy John’s, Schneiderman’s office struck settlement deals with legal news site Law360 and medical services company EMSI.