The bill amends the Rhode Island Noncompetition Agreement Act by introducing new definitions and provisions regarding noncompetition agreements. Key changes include the definition of "annualized earnings," which encompasses various forms of taxable compensation, and the introduction of a threshold for enforceability, stating that a noncompetition agreement is void unless the employee's annualized earnings exceed $125,000. Additionally, the bill clarifies that noncompetition agreements may be enforceable if they are reasonable in scope, time-frame, and application, and entered into as part of an agreement to sell a business entity or an equity interest in a business.

The bill also specifies that noncompetition agreements made by financial institutions engaged in insurance activities are included under certain conditions. Furthermore, it establishes a civil action for employers against employees who violate agreements related to trade secrets, allowing for potential remedies such as injunctive relief, compensatory damages, punitive damages, attorneys' fees, and costs. A severability clause is included to ensure that if any provision is found invalid, the remaining provisions will still be effective. The act is set to take effect on January 1, 2026.