Following in the footsteps of its neighbors Maine, Massachusetts, and New Hampshire, Rhode Island recently enacted legislation that restricts the use of non-competition agreements with certain types of employees. The Rhode Island Noncompetition Agreement Act, which becomes effective on January 15, 2020, prohibits non-competes without regard to geographic location and duration for the following types of employees:

  • Non-exempt employees under the FLSA;
  • Undergraduate or graduate students participating in an internship or short-term employment;
  • Employees aged 18 or younger; and
  • Low-wage workers (defined as earning 250% or less of the federal poverty level ($31,225 per year under current data).


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Over the course of the past several years, several states have banned or severely restricted the ability of businesses to bind low-wage workers to post-employment restrictive covenants. Since 2007, Oregon has banned non-compete agreements for all employees except those who are exempt (as defined by the state’s overtime payment statute) and whose annualized compensation at the time of termination exceeds the median income of a four-person family, as determined by the United States Census Bureau for the most recent year available at the time of the employee’s termination ($56,119 per year based on most currently-available data). In 2016, Illinois passed a statute banning non-compete agreements with low-wage workers (defined in Illinois to be non-governmental workers making less than the greater of the prevailing federal, state, or local minimum wage or $13 per hour). In 2018, contained within a wider-ranging non-compete bill, Massachusetts also banned employers from entering into non-compete agreements with non-exempt employees, as those employees classification is defined by the Fair Labor Standards Act (“FLSA”), as well  as employees under age 18, paid or unpaid student interns, or other short-term student employees who are enrolled in school.

While such legislation trickled out over the last several years, 2019 has seen five additional states enact prohibitions on utilizing non-compete agreements for certain low-wage employees, with at least seven other states and the District of Columbia considering similar non-compete legislation.


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The Attorneys General of ten states are investigating fast food franchisors for their alleged use of “no poach” provisions in their franchise agreements, according to a press release by the New Jersey Attorney General’s Office, and as reported by NPR.  In a July 9, 2018 letter, the Attorneys General for New Jersey, Massachusetts, California, Washington, D.C., Illinois, Maryland, Minnesota, New York, Oregon, Pennsylvania, and Rhode Island requested information from eight fast food companies about their alleged use of such provisions.  The letter states that the Attorneys General “have learned that certain franchise agreements used in our States and the District of Columbia . . . may contain provisions that impact some employees’ ability to obtain higher paying or more attractive positions with a different franchisee.”  In other words, the agreements purportedly prohibit one franchisee of a particular brand from hiring employees of another franchisee of the same brand.  
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shutterstock_331572470We’ve written a lot this summer about the Massachusetts legislature’s latest failed attempt at non-compete reform. Two other states in New England, however, are able to claim accomplishments in that regard. Specifically, Connecticut and Rhode Island each enacted statutes this summer imposing significant restrictions on the use of non-compete provisions in any agreement that establishes

shutterstock_276022649A physician signed a non-compete covenant, agreed to be enjoined if he breached, and allegedly did breach. But when his former employer asked a Providence, Rhode Island Superior Court judge to enter an injunction, he refused to prevent patients from being treated by a doctor of their own choosing. Medicine & Long Term Care Associates,

Can a California corporation with virtually no ties to Rhode Island nonetheless be sued in Rhode Island federal court for misappropriation of a Rhode Island company’s trade secrets because the California corporation lured away a Florida employee who had a confidentiality agreement with the Rhode Island company?   Yes, according to the United States Court of