Substitute House Bill No. 7196 introduces significant restrictions on noncompete and exclusivity agreements in Connecticut, set to take effect on July 1, 2025. The bill stipulates that noncompete agreements will be void for employees earning below three times the minimum wage and independent contractors earning below five times the minimum wage. It also establishes that such agreements cannot restrict workers in geographic areas where they did not provide services or in job types they did not perform within the two years prior to their separation. Additionally, the bill mandates that noncompete agreements must be supported by sufficient consideration, cannot be the sole basis for continued employment, and must be signed separately from other employment agreements.

The legislation empowers workers to take civil action against employers for violations, allowing for damages and civil penalties of up to $5,000. It also requires the Attorney General to provide information on filing complaints and to investigate violations, although the Attorney General cannot bring actions against state agencies or employees in their official capacity except under specific conditions. The bill repeals existing provisions that allowed certain employment restrictions unless trade secrets were involved, thereby enhancing worker protections and ensuring that any restrictions on employment opportunities are reasonable and justifiable.

Statutes affected:
Raised Bill: 31-50a
LAB Joint Favorable: 31-50a
File No. 367: 31-50a