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 SF 496 (2) 89 je/rn/mb
S.F. 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 -1- SF 496 (2) 89 je/rn/mb 1/ 2
S.F. 496 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. 9 -2- SF 496 (2) 89 je/rn/mb 2/ 2