LANSING — State Rep. Mari Manoogian (D-Birmingham) introduced House Bill 4874 today to ban the use of non-compete agreements in low-wage jobs, which are often used by shady businesses as a manipulation tactic to cripple healthy competition while also limiting worker mobility and pay. The bill was announced at a bicameral press conference where legislators unveiled a comprehensive package to protect workers and the state from the negative effects of payroll fraud.
“When it comes to low-wage industries, non-competes are often predatory, used as a tool to encourage employees to keep their mouths shut about bad business practices or to allow employers to artificially keep wages low,” said Manoogian. “Not only does that put good businesses at a disadvantage, it robs hardworking Michiganders of their chance to earn what they’re worth.”
According to a recent study, job mobility in Michigan fell by 8 percent after the state began allowing the use of non-compete agreements. Manoogian’s bill defines ‘low wage’ as less than any of the following: $15 per hour; 150 percent of the mandated minimum wage; or annual compensation of $31,200, which would be adjusted for inflation annually by the state Treasurer. The legislation would also require notice of non-compete agreements be given to prospective job applicants in cases where their use is still permitted.