One of the bills that passed the Connecticut General Assembly last year was a bill that would have limited the scope and use of noncompete agreements.
But as I noted in a post last summer, Governor Malloy vetoed that piece of legislation.
In his veto message, however, he signaled a willingness to agree to some future compromise on the bill noting that “additional protections for employees may be warranted to guarantee a reasonable period of time to review a written noncompete agreement before entering into an agreement in the first instance.”
He went on state that “it would begetter for both employers and employees to receive greater clarity from the General Assembly on this issue next session.”
Late last month, the Connecticut Law Tribune ran an editorial suggesting that a legislative solution may not the best path forward, even in light of what it viewed as employer’s over reliance on them.
Noncompetition agreements have a valid place in today’s economy, but their growing use to stifle healthy marketplace competition, their theoretical underpinnings as a strained corollary to the employment at-will rule and the disproportionate bargaining strength often used by employers to obtain them have infected these contracts with a taint of inherent unfairness and commercial impropriety. There is a need for reform—reform carried out through the process of common law evolution.
Why did the editorial board conclude that legislative remedies are “not the best answer”?Because they are often “drastic and short-sighted”. The board instead proposed that change come about in “orderly judicial reconsideration and doctrinal evolution.”
The editorial goes on to discuss the issues with noncompete agreements in greater detail and it’s worth a read. It notes that noncompete agreements “have a valid role to play in Connecticut’s economic mosaic” and that “legislative reform would doctrinally freeze them in time.”
It is advice well worth considering as the General Assembly takes up this task. It may be best to have no bill, then a lousy one.
(For a look at how one state, Georgia, has tackled this issue with legislation, check out this presentation.)
For employers, now is the time to speak up to your local legislators that a bill on the subject may not be the best path to what they may want to achieve.