Labor and Public Employees Committee
JOINT FAVORABLE REPORT
Bill No.: HB-6379
Title: AN ACT CONCERNING WORKERS' RIGHTS.
Vote Date: 3/25/2021
Vote Action: Joint Favorable Substitute
PH Date: 2/9/2021
File No.:
Disclaimer: The following JOINT FAVORABLE Report is prepared for the benefit of the
members of the General Assembly, solely for purposes of information, summarization and
explanation and does not represent the intent of the General Assembly or either chamber
thereof for any purpose.
SPONSORS OF BILL:
Labor and Public Employees
REASONS FOR BILL:
Workers in low-wage jobs are being forced to si
RESPONSE FROM ADMINISTRATION/AGENCY:
None submitted.
NATURE AND SOURCES OF SUPPORT:
LEWIS CHIMES, ATTORNEY
There is a statute (20-14p) that places restrictions on non-competition agreements for
physicians. There is no reason that carpenters, veterinarians, automobile salesmen and
restaurant workers should be treated any differently than doctors. Due to COVID-19, many
people have lost their jobs who had signed non-competition agreements as a condition of
their employment. These people have lost their livelihood due to no fault of their own and
they are banned from finding comparable work in their chosen field. This is unconscionable
and should not be allowed to continue. Healthy competition promotes fair pricing for goods
and services and motivates companies to provide better services. In the labor market, it
encourages employers to pay fair wages and provide reasonable benefits to maintain their
workforce. Employees generally have no right to refuse to sign a covenant if they want the
job. These covenants are not the result of negotiate terms between parties. Time limitations
on the ability to return to the job market over a year make it exceedingly difficult for trained
people to remain relevant in their professions. The burden of non-competition agreements is
felt most heavily by low income workers who don't have the resources to move away. This bill
provides a reasonable balance between the need of businesses to protect their legitimate
interest and the compelling economic public policy of allowing workers, particularly low-
income workers, free and unfettered access to the labor market.
CT TRIAL LAWYERS ASSOCIATION
They see no reason that other occupations should be treated any differently than doctors as
far as placing reasonable limitations on the right to force employees to sign a non-competition
agreement as a condition to employment. This proposal codifies the existing law on the
reasonableness of non-competition agreements with 5 important limitations: 1. One year
limitation on covenant not to compete. 2. Covenants not to compete shall not be imposed on
low income workers, 3. Covenants not to compete shall not be enforceable if the employer
discharges the employee or the employees leaves for good cause attributable to the
employer. 4. Employee are to be given a ten-day grace period to sign a covenant not to
compete and are to be advised that they have the right to consult with counsel prior to
signing. 5. This proposal does not affect employer's interest in protecting their existing
customers, confidential information and trade secrets. They urge passage of this bill.
JOSEPH D. GARRISON, ATTORNEY
Employment in CT and nearly every other state and territory is "at-will" Unless they have
the benefit of a collective bargaining agreement or another form of employment contract, CT's
worker can be terminated from their jobs for any reason or no reason at all, so long as the
reason is not an unlawful one. The growing prevalence of covenants undermines the trade-
offs because employees are unable to leave their employment for a better position in their
same industry because this would violate their non-compete agreements. They have no
choice but to stay. This bill would prohibit employers from enforcing non-competes against
employees who have been laid off. An employee who is facing a layoff through no fault of
their own should be able to accept any job offers. They encourage passage, but also suggest
the following: 1. Prohibit "blue Penciling". which permits courts to revise or rewrite
contractual clauses that are unenforceable in order to narrow them to the point they are
enforceable. 2. Prohibit "choice of law' and "forum selection" clauses. CT workers should
have the benefit of CT's non-compete law in courts or arbitrations in CT. 3, Prohibit one-way
fee shifts which are unfair, The fair approach is for both parties to recover their fees if they
'prevail' or for neither to do so. 4, Make developments in non-compete law retrospective. This
bill is a step In the right direction.
SUE GARTEN, GREATER HARTFORD LEGAL AID
Traditionally, non-compete covenants were intended to protect an employer's competitive
advantage by preventing more highly trained and compensated employees from taking a job
at a competing business and/or disclosing specialized knowledge and skills acquired at the
former employer. Now, employers have required low wage workers including fast food
workers, commercial cleaners and home health aides to sign these covenants. They do not
have any skills and are not privy to trade secrets. This us harmful to the economic well-being
of low wage workers and their families. Many of these workers do not have any other
marketable skills and this prevents them from seeking or accepting better jobs with higher
wages. This proposal has reasonable restrictions to ensure both employers ad employees
are adequately protected.
CT WOMEN'S EDUCATION AND LEGAL FUND
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Noncompete agreements often reduce a workers' ability to leave, or even threaten to leave a
job, since they are unable to advertise their skills to their employer's competition without treat
of litigation. If an employee seeks a new job, they may be forced to work in a different field
where their skills are les applicable and the pay lower. CT should prioritize retaining skilled
workers and bar the use of noncompete agreements. Too many workers are stuck in jobs
they don't want with wages that are too low. The pandemic has limited the opportunities
workers have. Women of color are already over-represented in low wage jobs. Workers
deserve the right to support their family and contribute to the economy by seeking
employment in the industry where they are skilled.
SAL LUCIANO, PRESIDENT, CT AFL-CIO
Non-competes were originally designed to protect employers from competition from
businesses who hired their former employees and utilized trade secrets, skills and experience
learned on the job. Now, low-wage employers, even in the service, restaurant and hospitality
industries, commonly require non-competes for entry-level positions. This is an abuse of
power and should be stopped. Amazon requires warehouse employees and fast food
restaurants are also players in this arena. These agreements are a way employers are
rigging the system by eliminating a workers right to move to a better paying position. Wages
are artificially suppressed which reduces overall economic growth. Protect vulnerable
workers by prohibiting the use of non-compete agreements where they are not warranted.
STACY ZIMMERMAN, PRESIDENT, SERVICE EMPLOYEES INTERNATIONAL UNION,
COUNCIL SEIU
They support this bill and all the bills on the pubic hearing agenda. These bills have the
ability to stabilize workplaces and they address both longstanding and COVID-19 related
employment issues.
NATURE AND SOURCES OF OPPOSITION:
CT HOSPITAL ASSOCIATION
As drafted, this bill does not provide sufficient clarity as to the restrictive covenants that are
proposed to be prohibited, making it impossible to assess the impact it would have. The
reference to "certain employees" does not indicate which employees or categories of
employees will be covered by the prohibition. The reference to "unfair covenants not to
compete" does not indicate how fairness is to be assessed in the context of the employer-
employee relationship or whether what is proposed is a change to current law. The statute
currently used (Public Act 16-95) defines a covenant not to compete as 'any provision of an
employment or other contract or agreement that creates or establishes a professional
relationship with a physician and restricts the right of a physician to practice medicine in any
geographic area of the state for any period of time after termination or cessation of such
partnership, employment or other professional relationship." A few years ago, the General
Assembly engaged in a long, arduous, and thorough examination of the use of covenants not
to compete in physician contracts. The outcome was a statute that attempts to achieve a
balance between the legitimate interests of both the employer and the physician. They urge a
decision to leave the current statute intact.
ERIC GJEDE, VICE PRESIDENT OF GOVERNMENT AFFAIRS, CBIA
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These agreements have been heavily restricted by the courts to balance the interests of
employers and employees while ensuring appropriateness of cope, geography and duration.
While there are circumstances where these agreements are inappropriate, this proposal
removes the protections noncompete agreement provide in circumstance where they are
needed most. This bill prohibits the use of these agreements for any employee that doesn't
earn at least twice the minimum wage. This is a problem because the new minimum wage is
not adjusted on an annual basis. This would void agreements as the wage rate rises over
time. Also, if an employer terminates a worker for good cause, the employee would not be
prohibited from stealing a former employer's clients or revealing trade secrets. Non-compete
agreements provide critical protections for many industries.
Reported by: Marie Knudsen, Assistant Clerk Date: March 21, 2021
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