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Monday, March 16, 2015

Backlash To Sandwich Noncompetes: Three States Propose Bills To Limit, Ban Noncompetes

After the world woke up and discovered a "secret" everyone who practices employment law already knew, that noncompete agreements are becoming so common even low-level employees like sandwich makers and dog groomers are being required to sign them to keep their jobs, four states are stepping up to change that. Whether the efforts will succeed is another story, but the discussion has finally begun.

Last year, Massachusetts engaged in a failed attempt to ban noncompete agreements because, as anyone with an economics degree can tell you, noncompetes are bad for economic development, especially in the tech sector. Efforts to pass legislation banning noncompetes in Massachusetts have redoubled and another bill is pending this year.

In Hawaii, a proposed bill would prohibit noncompete agreements in the tech sector. The state's Department of Education backs the legislation because it can't find enough qualified tech workers. "For employees of large consumer-oriented companies which do business with nearly everyone, a noncompete agreement tends to effectively eliminate nearly all viable options for employment within the state," the Superintendent of Education said in favor of the ban. "This encourages technology workers to move out of state to secure employment within their chosen field, thus reducing the available candidate pool to fill our most experienced positions."

A bill in New Mexico that would limit noncompete agreements with physicians has overwhelmingly passed in its Senate. New Mexico reports a physician shortage and they hope to alleviate it with this law.

On the flip side, abill getting the lots of press right now is the legislation to radically expand enforcement of noncompete agreements in Wisconsin. The legislation would have Wisconsin's pro-employee law on noncompetes turned into a horror show similar to the one we have right here in Florida. The bill includes gems like allowing employers to say, "sign or be fired" with no additional consideration than continued employment, barring courts from considering economic hardship on the employee, and allowing courts to rewrite the agreements in favor of employers. Even worse than Florida law, the courts won't be able to require employers to post a bond to protect employees from wrongfully issued injunctions.

So, while it looks like Jimmy Johns and its sandwich noncompetes has started a backlash against noncompetes in some states, in at least one Republicans are forging ahead to limit employee rights as much as they can while they can. Did they forget that employees are the very people who are also voters? Will voters in Wisconsin wake up? Will employees in Hawaii, New Mexico and Massachusetts push to regain their right to get a job (not to be confused with the Orwellian-named right to work laws, which are anti-employee laws)?

I'm glad Americans are finally talking about noncompete agreements. I hope voters will wake up in time to help themselves.


  1. As a general rule, I hate laws that restrict businesses. I'd rather see the free market handle this stuff. That said, the market isn't free and may the businesses that have imposed these non-competes on people get what they deserve. I think they are so sleazy.

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I appreciate your comments and general questions but this isn't the place to ask confidential legal questions. If you need an employee-side employment lawyer, try http://exchange.nela.org/findalawyer to locate one in your state.