New Federal Bill Would Nullify Non-Compete Agreements for Employees Fired for Refusing COVID Vaccine

In the last few years, restrictive covenants have increasingly come under fire from various state and federal legislatures. As we wrote about here, the federal government has doubled down on efforts to utilize existing laws to limit the applicability of restrictive covenants, such as non-compete agreements. Earlier this month saw the introduction of a new bill that has the potential to further erode the ability of employers to rely on restrictive covenants. Nine Republican members of the House of Representatives have put forward a bill would free any employees fired for refusing to get a COVID-19 vaccine from any non-compete agreement with their employers.

New York Representative Claudia Tenney is the lead sponsor of the bill, titled the “Employment Freedom for All Act.” The bill is partner legislation to the “Health Freedom for All Act,” which seeks to prevent the President from enacting a vaccine mandate on private businesses. In addition to voiding existing non-compete agreements, the new bill would also require the Federal Trade Commission (FTC) to issue regulations within 60 days prohibiting employers from enforcing non-compete agreements with such employees. The new federal bill follows in the footsteps of similar bills that have been introduced in numerous state legislatures including Texas and Tennessee and most recently New Hampshire.

According to its sponsors, the bill is a response to President Joe Biden’s call for the Occupational Safety and Health Administration (OSHA) to develop rules that require companies with at least 100 employees to be vaccinated against coronavirus or tested once per week. The Biden administration recently suspended efforts to enforce its vaccine mandate following a stay of the mandate issued by the Fifth Circuit Appeals Court earlier this month.

The bill’s sponsors also claim the bill is necessary to prevent exacerbating supply chain delays that have been affecting many industries in the past several months. Employee shortages present in a number of states and cities also plays into the need to prevent employers from keeping otherwise able employees from taking similar jobs elsewhere, according to the bill’s sponsors.

Besides Tenney, the bill’s other sponsors include Representatives Louie Gohmert of Texas, Jody Hice of Georgia, Tracey Mann of Kansas, Brian Mast of Florida, Mary Miller of Illinois, William Timmons of South Carolina, and Brett Guthrie of Kentucky. Despite the Biden administration’s stated goal of reducing enforcement of non-compete agreements, the bill has yet to garner any Democrat sponsors.

It remains to be seen, however, whether the bill gains traction in the House or has any hope of being passed by an evenly-divided Senate, particularly given the fact that Biden’s vaccine mandate is on hold for the time being. We will continue to monitor the situation and report any developments in the legislation as it has the potential to affect many Illinois employers.

Whether you are an employer thinking about requiring your employees to sign a restrictive covenant or an employee who is being asked to sign a non-compete agreement, it is always advisable to seek the assistance of an experienced employment and non-compete attorney. The Chicago and DuPage County employment and wage and hour attorneys at Lubin Austermuehle are among the best attorneys in the Chicagoland area with more than thirty years of experience defending and prosecuting non-solicitation and non-compete agreement and a myriad of other employment law disputes for business owners and employees alike. You can contact us by calling 630-333-0333. You can also contact us online here.