Two Ohio lawmakers have introduced a bipartisan bill to ban employers from enforcing noncompete clauses in any of their workers鈥� contracts.
Sens. Bill Blessing (R-Colerain Township) and Bill DeMora (D-Columbus) filed on Wednesday, one of the earliest bills to be introduced in the 136th General Assembly.
鈥淓ven the Republicans talk about (how) we need a workforce, workforce, workforce,鈥� DeMora said in a Thursday interview. 鈥淭hese noncompete agreements are just to keep somebody from moving to a better job to support their family.鈥�
Once a person leaves a job position, SB 11 mandates that employers could not prevent or penalize them from taking another job in the same city or field, or within a certain timeframe鈥攐ften referred to as a noncompete or a restrictive covenant.
It also bans liquidated damages, or different fees employers might impose on workers for terminating their employment. If SB 11 were to be enacted, it would render current contracts in violation of the bill void.
The bill is likely to face business community backlash, Blessing said.
鈥淲hat business wouldn鈥檛 want to become a monopoly?鈥� Blessing said in a Friday interview. 鈥淚t means you鈥檝e defeated all competition and you鈥檒l be immensely profitable, so business interests can very well be at odds with the economy at large.鈥�
He would be amenable to carve-outs, he said, like for senior level executives. Both Blessing and DeMora take issue with the proliferation of the practice.
鈥淭he fact that there are sub places now鈥攕ub submarine, not building submarines, but sandwich shops鈥攖hat have noncompete clauses, so building a sub now is some trade secret? It鈥檚 meat and cheese on a bun with dressing on it,鈥� DeMora said.
In 2016, sub chain Jimmy John鈥檚 for $100,000 with the Illinois attorney general over its extensive restrictive covenant.
Ohio is one of ten states with zero restrictions on noncompete agreements, according to the Economic Innovation Group, a federal policy group that pushes against them. Only California, Minnesota, North Dakota and Oklahoma have outright banned restrictive covenants.
Researchers haven鈥檛 nailed down how many workers have signed these agreements, but the number is often estimated at one in five. They have covered everyone from minimum-wage workers to chief executives, and have extended to independent contractors.
The Federal Trade Commission moved to outlaw the agreements for all sectors and workers nationwide starting in fall 2024, but a district court put that on hold prior to it taking effect, according to an FTC news release. The FTC is currently appealing the district court decision.
Senate committee hearings will likely start next week, according to a Senate GOP caucus spokesperson.