Buried deep in the budget (page 417 of 567) that was passed by the state House last night is this provision:
Sec. 305. (NEW) (Effective from passage) For purposes of this section “covenant not to compete” means any contract or agreement that restricts the right of an individual to provide homemaker, companion or home health services (1) in any geographic area of the state for any period of time, or (2) to a specific individual. Any covenant not to compete is against public policy and shall be void and unenforceable.
It’s so buried that I had to read it a few times to make sense of it. Was it part of some other law? What is it related to? Why no public hearing on this?
The bill prohibits contracts for provision of homemaker, companion, or home health services that restrict the right of an individual to provide such services in any geographic area of the state for any period of time or to a specific person (i.e., a “covenant not to compete”). Under the bill, such covenants are against public policy, void, and unenforceable.
What’s strange about this provision is that it looks nothing like other industry specific bans on non-compete agreements.
For example, Conn. Gen. Stat. Sec. 31-50b, creates a private cause of action if an employer enters into a barred agreement with a broadcast employee. The state budget provision in Section 305 just seems to throw such contracts out.
And for security guards, the provision in Conn. Gen. Stat. Sec. 31-50a is entirely different too. That law states:
No employer may require any person employed in the classification 339032 of the standard occupational classification system of the Bureau of Labor Statistics of the United States Department of Labor to enter into an agreement prohibiting such person from engaging in the same or a similar job, at the same location at which the employer employs such person, for another employer or as a self-employed person, unless the employer proves that such person has obtained trade secrets, as defined in subsection (d) of section 35-51, of the employer.
The state budget also doesn’t define what “homemaker, companion or home health services” are. It also says that it is barred as to any “specific individual”, leaving open the question of whether an individual includes a company or just actual persons. And is the use of a restrictive covenant like a non-solicitation provision still ok to use? It would appear so though the “any contract that restricts the right” language leaves a lot to be desired.
Provisions like this one — inserted into a budget document, rather than a standalone bill — do a disservice to all. And it’ll be left to the lawyers and courts to sort out the potential mess arising from a provision like this.