Substitute House Bill No. 6594 (sHB6594 File No. 11) introduces new regulations on noncompete agreements in employment contracts, defining enforceability criteria and setting forth conditions under which such agreements are valid. The bill mandates that noncompete agreements are enforceable only if they are necessary to protect legitimate business interests, are limited to a one-year duration post-employment, and are provided in writing to the worker at least ten business days before signing. It also stipulates that noncompete agreements are unenforceable against workers earning less than three times the minimum fair wage for employees or less than five times for independent contractors. Additionally, the bill restricts exclusivity agreements, allowing them only for exempt employees or independent contractors earning above a certain threshold, unless additional employment poses a safety risk or substantially interferes with scheduling expectations.

The bill outlines legal consequences for noncompliance, including actual damages or a penalty of $5,000, attorney's fees, and court costs for the worker, and grants the Attorney General the authority to bring civil actions on behalf of aggrieved workers. It also prohibits courts from modifying noncompliant covenants to make them enforceable. The bill repeals and replaces Section 31-50a of the general statutes, effective July 1, 2023, and applies to agreements entered into, renewed, or extended on or after that date. The fiscal impact statement indicates no fiscal impact to the state or municipalities. The bill also clarifies that its provisions do not apply to noncompete agreements covered under existing laws for certain professions.

Statutes affected:
Raised Bill: 31-50a
LAB Joint Favorable Substitute: 31-50a
File No. 11: 31-50a