A bill introduced Tuesday by D.C. Councilwoman Elissa Silverman (I-At Large) and co-sponsored by fellow Council member Vincent Gray (D-Ward 7) seeks to ban the use of non-compete agreements among entry-level and moderate-income employees who earn up to three times the minimum wage.
The 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.
“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. Such 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 $87,654 annually. The legislation would also bar restrictive language from being included in a company policy manual or employee handbook.
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 — referred to the Committee on Labor and Workforce Development — was co-introduced by Chairman Phil Mendelson (D-At Large) and six council members, 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).