The busy season for the Connecticut General Assembly is continuing with the final push for bills now underway.

Another bill that has been sneaking below the radar is House Bill 6658.  The bill, entitled “Employer Use of Noncompete Agreements”, has passed the Judiciary Committee, again without being referred to the Labor & Public Employee committee.  It is now pending before the House.

The bill would apply to all employers in the state and, for the first time, attempt to regulate all restrictive covenants or non-compete agreements through a law. (Previously only broadcast employees and security guards were covered by such restrictions.)  Only agreements created after October 1, 2013 would be covered.  Currently, the rules regarding such agreements have been developed through caselaw. 

The bill allows an employer to use such an agreement “if (1) the agreement or covenant is reasonable as to its duration, geographical area, and the type of employment or line of business, and (2) prior to entering into the agreement or covenant, the employer provides the employee a reasonable period of time, of not less than ten business days, to seek legal advice relating to the terms of the agreement or covenant.”

It’s the second part of the bill that should concern employers because it goes far beyond current caselaw.  It would create a new cause of action (or way an employee can bring a lawsuit) for employers that violate the law and allow for the recovery of damages and attorneys fees.   

Any person who is aggrieved by a violation of this section may bring a civil action in the Superior Court to recover damages, together with court costs and reasonable attorney’s fees. To the extent any such agreement or covenant is found to be unreasonable in any respect, a court may limit the agreement or covenant to render it reasonable in light of the circumstances in which it was entered into and specifically enforce the agreement or covenant as limited.

Continue Reading Bill Targets Non-Compete Agreements But Would Also Create New Cause of Action