The bill amends the Rhode Island Noncompetition Agreement Act, specifically Sections 28-59-2 and 28-59-3, and adds a new section, 28-59-4. The amendments redefine certain terms and clarify the enforceability of noncompetition agreements. Notably, the definition of "earnings" and "low-wage employee" are deleted, and the scope of what constitutes a noncompetition agreement is expanded to include agreements that are prohibited by §28-59-3(a). Additionally, the bill introduces a new provision that noncompetition agreements are generally not enforceable against employees, with exceptions for reasonable noncompetition agreements entered into in connection with the sale of a business entity or equity interest. The bill also allows for civil action by employers against employees who violate agreements related to trade secrets, with potential remedies including injunctive relief, compensatory damages, punitive damages, attorneys' fees, and costs.

The explanation provided by the Legislative Council states that the act aims to prohibit noncompetition agreements except when they are between a seller and buyer of a business. Furthermore, it establishes a civil action for employers against employees who disclose or wrongfully utilize trade secrets. The bill would take effect upon passage, indicating that the changes would be immediate. The bill also makes several insertions, such as allowing noncompetition agreements made by financial institutions subject to the Gramm-Leach-Bliley Act and specifying that noncompetition agreements are not enforceable against an employee, with the exception of those that are reasonable and related to the sale of a business. It also adds that any noncompetition agreement in violation of the specified section is null and void as a violation of public policy.