Non-compete clauses in employment contracts with low-wage workers impacts upward mobility and their ability to negotiate for higher wages or improved working conditions. That is why, on October 31, 2019, Rhode Island Governor Gina Raimundo signed the Rhode Island Noncompetition Agreement Act (H6019/S0698) at Chad Brown’s Tavares Center.
The Center is a polling place and the first location where both Raimundo and her colleague State Senator Maryellen Goodwin (RI District 1 Providence) first heard about low-income neighborhood residents struggling to move up in their careers due to non-compete clauses at their jobs. Both were outside the Tavares Center, which is used as a polling place during elections, when they were approached by a local resident who shared their story. This prompted action by both women, who worked to move a bill forward that would protect low-wage workers from non-compete employment clauses.
About the Bill
Despite existing to protect trade secrets and the sharing of industry knowledge, non-compete agreements expanded into low-wage and low-skill industries rapidly over the last two decades. Roughly 15% of workers without a college degree and 14% of workers earning less than $40,000 per year are subject to a non-compete agreement. For example, you work at Sandwich Shop X and can be employed for more hours or better wages at Sandwich Shop Y but you cannot leave because you signed a non-compete clause with Sandwich Shop X prohibiting you from making sandwiches at Sandwich Shop Y. Aside from limiting mobility within industries, the clause causes many low-wage workers to leave their industry and forfeit working with previously developed skills (and earning more wages according to that higher skill level).
The Act makes noncompetition, or non-compete clauses, unenforceable against employees who are:
- Nonexempt under the Fair Labor Standards Act,
- Are currently enrolled in undergraduate or graduate work and serving as an intern,
- Under the age of 18, or
- Employees whose average weekly earnings are less than the average statewide weekly wage.
The Act’s Impact at the PHA
Josselyn Velasquez-Florian from the Providence Housing Authority’s Resident Services Department introduced the Governor at the signing and spoke of one of the residents she works with to improve her economic situation. “Angela is both mother and father to her children. She is the holder of her family’s dreams. Like many of the people we work with, she is overcoming employment challenges like language barriers, getting hired without a high school diploma, transportation issues, and she navigates this world with a hearing impairment which limits her employment options even further…Like all Rhode Island families, Angela is determined to succeed and climb the highest mountain with the certainty that she will move her family forward – no matter what.”
Rhode Island is among six states that now restricts non-compete clauses throughout the U.S. The Governor was joined by bill sponsors State Senator Maryellen Goodwin and State Representative Christopher Blazejewski (RI District 2), as well as Providence Councilman Nicholas “Nick” Narducci (Providence Ward 4) and the PHA’s Executive Director, Melissa Sanzaro, for the bill signing.