Legislation recently introduced in the United States Senate to protect low-wage workers could roll back the use of non-compete agreements, a common tool companies use to protect their trade secrets.

Florida Senator Marco Rubio introduced the “Freedom to Compete Act,” which aims to protect low-wage and entry-level employees from non-compete agreements, which generally restrict former employees from working at or starting competing businesses. Under this proposed legislation, employers would be prohibited from entering into, enforcing, or threatening to enforce non-compete agreements against workers considered “non-exempt” under the Fair Labor Standards Act (FLSA). Unlike certain executive and administrative employees, “non-exempt” workers must be paid at least the federal minimum wage and are entitled to overtime pay.

Proponents of this legislation argue that non-compete agreements unfairly restrict employment opportunities for low-wage and entry-level workers by limiting their economic mobility and their ability to negotiate for higher wages and training, which is compounded by the fact that many of these workers may already face limited employment opportunities in the current economy. In addition, proponents point out that these workers are less likely to have access to confidential information and trade secrets in the first place. Companies have long turned to non-compete agreements to ensure their trade secrets are protected, and studies indicate that about 18% of all U.S. workers are subject to non-compete agreements. If this legislation passes, companies may be forced to reevaluate what level of disclosure risk low-wage employees pose to their trade secrets and how best to protect those trade secrets without the benefit of routine non-compete agreements.

On January 25, 2019, the Illinois Supreme Court in Rosenbach v. Six Flags Entertainment Corp. ruled unanimously that plaintiffs do not need to allege “some actual injury or adverse effect” in order to challenge alleged violations of Illinois’ Biometric Information Privacy Act (BIPA). In so doing, the Supreme Court expressly held that the loss of an individual’s right to control her “biometric privacy” is a “real and significant” injury on its own – whether or not that loss has any real-world effect.

What might the decision’s far-reaching implications for companies that collect and retain biometric data from their consumer or employees be?

Click here to read the full version of this alert, authored by Crowell & Moring Partner Jeff Poston, Counsel Josh Foust, and Associate Brandon Ge.