Silverman Bill Bans Non-Compete Agreements for Entry Level and Moderate-Income District Workers
D.C. Councilmember Elissa Silverman (I-At Large) today introduced legislation that would ban the use of non-compete agreements in entry-level and moderate-income employment. These agreements, which are often a condition of employment, unfairly limit a worker’s ability to earn better pay and benefits by restricting employees from taking an additional job or future job with another business in the same industry. The bill would apply to D.C. workers who earn up to three times the minimum wage.
“We need to remove every barrier keeping District workers from earning what they deserve and from taking advantage of better pay and working conditions,” Silverman said. “These non-compete agreements are particularly unfair for low-wage workers and contribute to income inequality in our city.”
Studies have found that use of non-compete agreements leads to lower wages, wider wage gaps for workers based on gender and race, and a decreased likelihood that workers will receive a raise, even in strong labor markets. These employment contracts prevent workers from earning additional pay through part-time work with other employers or earning higher pay by taking their skills to another employer. Employers who have used non-compete agreements include WeWork and Jimmy John’s.
The legislation draws on recommendations made in the State Call to Action on Non-Compete Agreements issued by President Barack Obama in 2016. Several states, including Maryland, have recently implemented similar laws.
The Ban on Non-Compete Agreements Amendment Act of 2019 would put an end to the use of non-compete agreements for D.C. workers who earn a regular hourly wage or equivalent salary up to three times the current minimum wage, which equals $87,654 annually. The legislation would also bar restrictive language from being included in a company policy manual or employee handbook. The legislation would not prohibit employers from protecting trade secrets or intellectual property.
Employers who violate the law would be subject to a fine of up to $2,000, with the highest penalties reserved for employers who retaliate against workers for asking about their rights or filing a complaint.
The bill was co-introduced by Chairman Phil Mendelson (D-At Large) and six councilmembers: Anita Bonds (D-At Large), Brianne Nadeau (D-Ward 1), Jack Evans (D-Ward 2), Mary Cheh (D-Ward 3), Charles Allen (D-Ward 6), and Trayon White (D-Ward 8). Councilmember Vincent Gray (D-Ward 7) was a co-sponsor. The legislation was referred to the Committee on Labor and Workforce Development.