Substitute House Bill No. 5269 (sHB5269), effective July 1, 2024, introduces new regulations on noncompete and exclusivity agreements in employment and independent contractor relationships. The bill defines various terms related to employment compensation and agreements, and sets conditions for the enforceability of noncompete agreements, such as a maximum duration of one year post-employment (extendable to two years under certain conditions), necessity for protecting legitimate business interests, and being no more restrictive than necessary. It prohibits enforcement against workers earning less than three times the minimum fair wage for employees or less than five times the minimum fair wage for independent contractors. The bill also specifies that noncompete agreements are unenforceable if they apply to geographic areas where the worker did not provide services or have a material presence or influence, and it repeals and substitutes Section 31-50a of the general statutes for agreements entered into, renewed, or extended from October 1, 2007, to July 1, 2024.

The bill outlines that exclusivity agreements, which prevent workers from engaging in other employment, are only enforceable under certain wage thresholds or if additional employment poses safety risks or interferes with scheduling expectations. It allows for civil action in Superior Court for violations, with the possibility of damages, civil penalties, and equitable and injunctive relief, and permits the attorney general to seek various remedies, including injunctive or declaratory relief and damages. The bill places the burden of proof on the party seeking to enforce a noncompete or exclusivity agreement and prohibits courts from modifying unenforceable agreements to make them valid. The bill also sunsets a law prohibiting noncompete agreements for security guards, to be replaced by the general provisions of this bill. The Labor and Public Employees Committee has given a Joint Favorable report to the bill with a vote of 8 to 4 on March 7, 2024.

Statutes affected:
Raised Bill: 31-50a
LAB Joint Favorable: 31-50a
File No. 104: 31-50a