Employers use noncompete clauses at all levels of employment, from executives to managers to delivery drivers. Such agreements allow employers to protect their business interests like trade secrets, customer contact lists, and investments in employee training. But restrictions on mobility could disproportionately impact low-wage employees. Moreover, enforcement of noncompetition agreements varies widely throughout the states, with some states favoring enforcement and other states, like California, broadly prohibiting noncompetition agreements. In 2015, United States Senators Chris Murphy and Al Franken introduced a bill that federally prohibits employers from requiring low-wage employees to enter into covenants not to compete, the Mobility and Opportunity for Vulnerable Employees (MOVE) Act. Although a statutory prohibition like California’s seems facially reconcilable with the MOVE Act, the scope of prohibitions encompassed by each statute are far apart. Therefore, if the MOVE Act or similar federal legislation were passed, it would preempt California law because the state’s broad prohibition would conflict with the Act’s balancing of employer and employee interests and would nullify the Act’s remedial structure.
Thomas, Phillip D.
"Would California Survive the MOVE Act?: A Preemption Analysis of Employee Noncompetition Law,"
University of Chicago Legal Forum: Vol. 2017, Article 31.
Available at: https://chicagounbound.uchicago.edu/uclf/vol2017/iss1/31