PRINTER'S NO. 2099
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1590
Session of
2017
INTRODUCED BY BULLOCK, McCLINTON, THOMAS, FREEMAN, HILL-EVANS,
VAZQUEZ, CALTAGIRONE, DeLUCA, WARREN, DONATUCCI AND MADDEN,
JUNE 21, 2017
REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, JUNE 21, 2017
AN ACT
Prohibiting certain covenants not to compete; conferring powers
and duties on the Department of Labor and Industry; and
imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Freedom to
Work Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Covenant not to compete." An agreement between an employer
and a low-wage employee that restricts a low-wage employee from
performing work for another employer:
(1) for a specified period of time;
(2) in a specified geographical area; or
(3) that is similar to the low-wage employee's work for
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
the employer that is party to the agreement.
"Department." The Department of Labor and Industry of the
Commonwealth.
"Employer." As defined in section 3(g) of the act of January
17, 1968 (P.L.11, No.5), known as The Minimum Wage Act of 1968.
The term does not include governmental or quasi-governmental
bodies.
"Low-wage employee." An employee who earns:
(1) an hourly rate equal to the minimum wage required by
the applicable Federal, State or local minimum wage law; or
(2) a wage 30% or more below the Pennsylvania median
wage for all workers as calculated by the United States
Department of Labor or $20 or less per hour, whichever is
greater.
Section 3. Prohibiting covenants not to compete for low-wage
employees.
(a) General rule.--No employer may enter into a covenant not
to compete with a low-wage employee of the employer.
(b) Void agreements.--A covenant not to compete entered into
between an employer and a low-wage employee is void.
Section 4. Enforcement.
The department shall enforce this act and may conduct
investigations as it deems necessary for enforcement.
Section 5. Penalty.
An employer found to be in violation of any provision of this
act shall be subject to the following penalties:
(1) A fine of not more than $5,000 upon the first
violation.
(2) A fine of not more than $10,000 for each subsequent
violation.
20170HB1590PN2099 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Section 6. Applicability.
This act shall apply to covenants not to compete entered into
on or after the effective date of this act.
Section 7. Effective date.
This act shall take effect in 60 days.
20170HB1590PN2099 - 3 -
1
2
3
4
5