On July 11, 2019, Governor Sununu signed S.B. 197 into law. S.B. 197 prohibits an employer from requiring an employee who makes 200% of the federal minimum wage ($14.50) to sign a non-compete agreement restricting the employee from working for another employer for a specified period of time or within a specific geographic area. Any “noncompete agreement entered into between an employer and a low-wage employee shall be void and unenforceable.” The new law will take effect in September. S.B. 197 had bipartisan sponsorship.
New Hampshire joins states like Massachusetts, Maryland, Illinois, and Washington, all of which have passed legislation limiting restraints placed on lower wage employees. For example, in Washington, non-competes are only enforceable for employees earning over $100,000 per year. Unlike in New Hampshire, Washington’s bill specifically notes that it does not “prohibit an agreement that prohibits the disclosure of trade secrets . . . .” In 2015, a similar piece of federal legislation failed to garner the necessary support.
We will continue to closely monitor proposed non-compete legislation across the nation and report back with any updates.