I 
114TH CONGRESS 
1ST SESSION H. R. 2873 
To prohibit employers from requiring low-wage employees to enter into cov-
enants not to compete, to require employers to notify potential employees 
of any requirement to enter into a covenant not to compete, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 24, 2015 
Mr. CROWLEY (for himself, Ms. LINDA T. SA´NCHEZ of California, Mr. ELLI-
SON, and Mr. POCAN) introduced the following bill; which was referred 
to the Committee on Education and the Workforce 
A BILL 
To prohibit employers from requiring low-wage employees 
to enter into covenants not to compete, to require em-
ployers to notify potential employees of any requirement 
to enter into a covenant not to compete, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Limiting the Ability 
to Demand Detrimental Employment Restrictions Act’’ or 
the ‘‘LADDER Act’’. 
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SEC. 2. DEFINITIONS. 
In this Act: 
(1) COMMERCE.—The term ‘‘commerce’’ has 
the meaning given such term in section 3 of the Fair 
Labor Standards Act of 1938 (29 U.S.C. 203). 
(2) COVENANT NOT TO COMPETE.—The term 
‘‘covenant not to compete’’ means an agreement— 
(A) between an employee and employer 
that restricts such employee from performing— 
(i) any work for another employer for 
a specified period of time; 
(ii) any work in a specified geo-
graphical area; or 
(iii) work for another employer that is 
similar to such employee’s work for the 
employer included as a party to the agree-
ment; and 
(B) that is entered into after the date of 
enactment of this Act. 
(3) EMPLOYEE; EMPLOYER; ENTERPRISE; EN-
TERPRISE ENGAGED IN COMMERCE OR IN THE PRO-
DUCTION OF GOODS FOR COMMERCE; GOODS.—The 
terms ‘‘employee’’, ‘‘employer’’, ‘‘enterprise’’, ‘‘enter-
prise engaged in commerce or in the production of 
goods for commerce’’, and ‘‘goods’’ have the mean-
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(6) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Labor. 
(7) STATE.—The term ‘‘State’’ has the mean-
ing given such term in section 3 of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 203). 
SEC. 3. PROHIBITING COVENANTS NOT TO COMPETE FOR 
LOW-WAGE EMPLOYEES. 
(a) IN GENERAL.—No employer shall enter into a 
covenant not to compete with any low-wage employee of 
such employer, who in any workweek is engaged in com-
merce or in the production of goods for commerce (or is 
employed in an enterprise engaged in commerce or in the 
production of goods for commerce). 
(b) NOTICE.—An employer who employs any low- 
wage employee, who in any workweek is engaged in com-
merce or in the production of goods for commerce (or is 
employed in an enterprise engaged in commerce or in the 
production of goods for commerce), shall post notice of 
the provisions of this Act in a conspicuous place on the 
premises of such employer. 
(c) INFLATION ADJUSTMENT.— 
(1) IN GENERAL.—For each fiscal year after 
the fiscal year of the date of enactment of this Act, 
the Secretary shall adjust the amount set forth in 
section 2(4)(A)(i) for inflation by increasing such 
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amount, as in effect for the preceding fiscal year, by 
the annual percentage increase in the Consumer 
Price Index for Urban Wage Earners and Clerical 
Workers (United States city average, all items, not 
seasonally adjusted), or its successor publication, as 
determined by the Bureau of Labor Statistics. 
(2) ROUNDING
AMOUNTS.—The amounts ad-
justed under paragraph (1) shall be rounded to the 
nearest multiple of $0.05. 
SEC. 4. DISCLOSURE REQUIREMENT FOR COVENANTS NOT 
TO COMPETE. 
In order for an employer to require an employee, who 
in any workweek is engaged in commerce or in the produc-
tion of goods for commerce (or is employed in an enter-
prise engaged in commerce or in the production of goods 
for commerce) and is not a low-wage employee, to enter 
into a covenant not to compete, the employer shall, prior 
to the employment of such employee and at the beginning 
of the process for hiring such employee, have disclosed to 
such employee the requirement for entering into such cov-
enant. 
SEC. 5. ENFORCEMENT. 
(a) IN GENERAL.—The Secretary shall receive, inves-
tigate, attempt to resolve, and enforce a complaint of a 
violation of section 3 or 4 in the same manner that the 
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Secretary receives, investigates, and attempts to resolve 
a complaint of a violation of section 6 or 7 of the Fair 
Labor Standards Act of 1938 (29 U.S.C. 206 and 207), 
subject to subsection (b). 
(b) CIVIL FINE.— 
(1) MAXIMUM FINE.—The Secretary shall im-
pose a civil fine— 
(A) with respect to any employer who vio-
lates section 3(a) or 4, an amount not to exceed 
$5,000 for each employee who was the subject 
of such violation; and 
(B) with respect to any employer who vio-
lates section 3(b), an amount not to exceed 
$5,000. 
(2) 
CONSIDERATION.—In 
determining 
the 
amount of any civil fine under this subsection, the 
Secretary shall consider the appropriateness of the 
fine to the size of the employer subject to such fine 
and the gravity of the applicable violation. 
Æ 
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