Senate
File
496
-
Reprinted
SENATE
FILE
496
BY
COMMITTEE
ON
LABOR
AND
BUSINESS
RELATIONS
(SUCCESSOR
TO
SSB
1147)
(As
Amended
and
Passed
by
the
Senate
March
29,
2021
)
A
BILL
FOR
An
Act
prohibiting
employers
from
entering
into
noncompete
1
agreements
with
low-wage
employees.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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496
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496
Section
1.
NEW
SECTION
.
94.1
Definitions.
1
As
used
in
this
section,
unless
the
context
otherwise
2
requires:
3
1.
“Confidentiality
agreement”
means
an
agreement
between
4
an
employer
and
employee
by
which
an
employee
agrees
not
to
5
disclose
specified
information
designated
by
the
employer
as
6
confidential.
7
2.
“Employee”
means
a
natural
person
who
is
employed
in
this
8
state
for
wages
by
an
employer.
9
3.
“Employer”
means
a
person,
as
defined
in
chapter
4,
who
10
in
this
state
employs
for
wages
an
employee.
11
4.
“Low-wage
employee”
means
an
employee
who
earns
an
12
average
monthly
wage
that
is
less
than
or
equal
to
fourteen
13
dollars
and
fifty
cents
an
hour.
14
5.
a.
“Noncompete
agreement”
means
an
agreement
between
an
15
employer
and
a
low-wage
employee
that
restricts
the
low-wage
16
employee
from
performing
any
of
the
following:
17
(1)
Work
for
a
different
employer
for
a
specified
period
of
18
time.
19
(2)
Work
in
a
specified
geographical
area.
20
(3)
Work
for
a
different
employer
that
is
similar
to
the
21
low-wage
employee’s
work
for
the
employer
who
is
a
party
to
the
22
agreement.
23
b.
“Noncompete
agreement”
does
not
include
any
of
the
24
following:
25
(1)
A
nonsolicitation
agreement.
26
(2)
A
confidentiality
agreement.
27
(3)
An
agreement
prohibiting
use
or
disclosure
of
trade
28
secrets
or
inventions.
29
6.
“Nonsolicitation
agreement”
means
an
agreement
between
30
an
employer
and
employee
that
prohibits
solicitation
by
31
an
employee,
upon
termination
of
employment,
of
any
of
the
32
following:
33
a.
An
employee
of
the
employer
to
leave
employment
by
the
34
employer.
35
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b.
A
customer
of
the
employer
to
cease
or
reduce
the
extent
1
to
which
the
customer
does
business
with
the
employer.
2
Sec.
2.
NEW
SECTION
.
94.2
Noncompete
agreements
with
3
low-wage
employees
prohibited.
4
1.
An
employer
shall
not
require
a
low-wage
employee
to
5
enter
into
a
noncompete
agreement.
6
2.
A
noncompete
agreement
entered
into
between
an
employer
7
and
a
low-wage
employee
on
or
after
the
effective
date
of
this
8
Act
shall
be
void
and
unenforceable.
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