Legislating Low-Wage Non-Competes: Reconciling Policy Interests with Common Law

Source: www.businesslawutah.com

By Derek Franklin

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In August 2016, the Illinois General Assembly enacted the Illinois Freedom to Work Act, which prohibits non-compete agreements with private sector employees making less than $13 per hour altogether.   Although there are legitimate policy reasons for invoking the Act, banning these agreements with low-wage workers without any room for exception runs the risk of unnecessarily nullifying some agreements that actually are backed by a “legitimate business interest” and do not impose unreasonably restrictive restraints.  One possible solution to this would be to amend the statute to allow for a small set of narrowly-defined exceptions when a non-compete agreement with a low-wage worker may be enforceable.  Incorporating a narrow set of highly specific exceptions when employers could enter into enforceable non-compete agreements with low-wage employees would prevent the statute from being overly broad and divergent from the Illinois common-law approach without sapping its ability to accomplish important policy objectives.