Earlier this month four Senators proposed a federal law to prohibit the use of covenants not compete against so-called “low wage employees.” The Mobility and Opportunity for Vulnerable Employees Act (MOVE Act) would seemingly be the first federal law related to non competes, which have traditionally been creatures of state law.
The MOVE Act covers employees earning the greater of $15 per hour or $31,200 per year. Agreements with such employees are void if the agreement limits “(i) any work for another employer for a specified period of time; (ii) any work in a specified geographical area; or (iii) work for another employer that is similar to such employee’s work for the employer included as a party to the agreement.” Beyond civil enforcement, the Secretary of Labor may impose a civil fine of up to $5000 for each agreement that violates the MOVE Act and a $5000 fine for failure to post notice.