Understanding the Rhode Island Noncompetition Agreement Act: Exemptions for Low-Wage Workers and Students
Under the Rhode Island Noncompetition Agreement Act, employers cannot enforce non-compete clauses against low-wage earners, students, minors, and non-exempt hourly workers. If you fall into these categories, your non-compete is legally void.
Signing new hire paperwork can be stressful, especially when an employer slips in a non-compete agreement. A non-compete restricts where you can work after leaving a company. For many years, these restrictive covenants were forced on everyone from fast-food cashiers to summer interns. Fortunately, the state has cracked down on this practice. Whether you work in Providence, Warwick, or Cranston, the Rhode Island Noncompetition Agreement Act (RINAA) provides powerful protections for vulnerable workers. If you believe your employer is violating your rights, you can easily find a local employment lawyer in our directory to review your contract.
Who is Exempt Under the Rhode Island Noncompetition Agreement Act?
The core of this protection is found within R.I. Gen. Laws § 28-59-3. This law expressly voids non-competition agreements for several specific groups of workers, meaning employers cannot legally enforce them in court. The legislation was designed to ensure that entry-level, younger, and hourly workers are not unfairly blocked from earning a living in their chosen field.
Low-Wage Earners (Under 250% Federal Poverty Level)
One of the most important exemptions applies to low-wage earners. In Rhode Island, you cannot be subjected to a non-compete if your average annual earnings fall below 250% of the federal poverty level. The exact dollar amount fluctuates annually based on federal guidelines, but it effectively protects thousands of minimum-wage and lower-income workers in retail, hospitality, and administrative roles from being trapped by their employers.
Undergraduate and Graduate Students
College students often take internships or part-time jobs to gain experience. The law clearly states that undergraduate or graduate students who are enrolled in an educational institution and working temporarily (such as a summer internship or a co-op) cannot be bound by a non-compete. This ensures that a student working at a tech firm in Newport for the summer is free to accept a permanent job at a competing firm upon graduation.
Minors Aged 18 and Under
Workers who are aged 18 and under are completely exempt from non-competition agreements. The state recognizes that teenagers working after-school or summer jobs should never have their future career mobility restricted by a fast-food franchise or local retail store.
Non-Exempt Hourly Workers
If you are an hourly worker who is entitled to overtime pay under the 29 U.S.C. § 201, you are considered a 'non-exempt' employee. Under Rhode Island law, non-exempt hourly workers cannot be bound by a non-compete. This exemption broadly protects factory workers, medical assistants, delivery drivers, and countless other hourly professionals.
What to Do if an Employer Forces an Illegal Non-Compete
Despite the law, some companies still use generic, outdated templates that include illegal non-compete clauses. The Rhode Island Supreme Court has long scrutinized restrictive covenants, as seen in foundational cases like Durapin, Inc. v. American Products, Inc., 559 A.2d 1051 (RI Supreme Court 1989), which established that non-competes must be reasonable. With RINAA in place, for exempt workers, the clause is not just unreasonable-it is void.
If you are presented with one of these agreements, you have options. You can kindly inform the HR department that the clause violates state law. If they threaten to withhold employment or fire you for refusing to sign, you can file a complaint with the Rhode Island Department of Labor and Training, Cranston. Remember, simply signing the document does not make it legal. If you already signed one and want to switch jobs, an employer will not be able to obtain a court injunction to stop you if you fall into one of the protected categories.
Frequently Asked Questions (FAQ)
Does this law apply to non-solicitation agreements?
Generally, no. The Rhode Island Noncompetition Agreement Act specifically targets non-competes (agreements stopping you from working for a competitor). Employers can still legally ask you not to steal their clients or recruit their other employees after you leave.
What if I make more than 250% of the federal poverty level?
If you do not fall into the low-wage, student, minor, or non-exempt categories, your non-compete might be valid. However, Rhode Island courts will still review it to ensure it is reasonable in duration, geographic scope, and necessary to protect legitimate business interests.
Does the law protect independent contractors?
The law primarily focuses on the employer-employee relationship. True independent contractors operate business-to-business, but if you are misclassified, the exemptions might still apply to you.
Can I be fired for refusing to sign a void non-compete?
While Rhode Island is an at-will employment state, firing a worker for refusing to sign an illegal contract could be considered a violation of public policy, potentially giving rise to a legal claim.
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