On the West Coast, Washington joined the group earlier this year by limiting competition bans to employees earning less than $100,000 a year (and $250,000 a year for contractors). Washington`s statute, like Maine`s, provides for additional restrictions such as the obligation to link existing employees to a non-compete obligation, to limit the time limit for authorized agreements to 18 months, and to allow employees to recover their legal fees, fees and claims (or a $5,000 fine) if a federal law change is required to make it enforceable. The Washington Law will take effect on January 1, 2020. While it can be argued that the concept of “non-counterfeiting” encompasses confidentiality and confidentiality agreements, the recognized rules relating to the legal structure and purpose of the statute should result in the opposite result.8. What are the practical difficulties of the law? The law defines a “non-compete agreement” as an agreement preventing such a low-wage employee from working for another employer for a period of time; Work in a given geographic area or working for another employer similar to the worker`s work for the employer who is a party to the non-compete agreement. This definition is broad and offers alternative definitions that cover a wide range of agreements, however different they may be. It may seem simple enough, but a closer look at the new legislation reveals an involuntary complexity that is likely to create confusion. The central question is: does the new law invalidate non-competition prohibitions that completely or partially prevent a low-wage employee from working competitively? When a business buys another, the buyer often requires the seller`s staff to sign non-compete obligations (if the seller did not require it beforehand) or to sign the non-competition obligations used by the buyer. If the buyer acquires the seller`s assets, he can provide a copy of his non-compete commitment to the seller`s employees in connection with job offers from the buyer or a new entity. On the other hand, if the buyer acquires the seller`s equity or merges with the seller, the seller`s staff will continue its previous activity and, therefore, the buyer will not have the opportunity to apply non-compete obligations (or his own non-competition obligations) without reclassifications of employment. Such an arbitrary result is an unfortunate effect of the new law, which could have a negative impact on the way business transactions are conducted in New Hampshire. It seems most reasonable to interpret the new law as prohibiting any agreement (regardless of the label) that prevents a low-wage employee from working in whole or in part competitively against a former employer.
This prohibition would involve agreements that prevent a low-wage worker from working for a period of time (often 12 months) for a competitor, or from doing business with clients or from trying to conduct transactions with clients with whom the worker was working while working with the former employer. The new status is short and does not define any of its conditions. As a result, the statute raises a large number of issues that will likely need to be resolved by the New Hampshire courts. In the meantime, employers should make room for the new law to maximize the chances of maintaining their future non-competitive, non-protective and similar agreements. The northeastern states of New Hampshire and Maine have joined a growing list of others who have stricter restrictions on non-competition and, in particular, limit (and in some cases, completely prohibit) their use with low-income workers. You may recall that last year, Massachusetts banned non-compete bans for people classified as tax-exempt workers.