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Committee hears proposal to bar noncompetes for nonexempt workers; members debate wage gate
Summary
The House Committee on General and Housing reviewed draft language to add a narrow noncompete ban to S.230, prohibiting agreements not to compete for nonexempt employees and preserving collective-bargaining carve-outs; lawmakers and counsel debated whether to tie the ban to FLSA exempt/nonexempt tests or use a fixed wage threshold.
Sophie, legislative counsel at the Office of Legislative Counsel, told the House Committee on General and Housing on April 14 that a proposed addition to S.230 would insert a new section in the Fair Employment Practices Act to prohibit agreements not to compete with nonexempt employees, calling them "presumptively coercive" unless the term was part of a collective bargaining agreement.
The proposal, counsel said, would make noncompete clauses unenforceable for hourly and other "nonexempt" roles as defined by the Fair Labor Standards Act and would attach FEPA remedies and existing penalty provisions for violations. Sophie noted that the draft preserves carve-outs commonly used in noncompete law — for example, sales of a business, trade-secret protections, and…
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