Labor Committee Bill Threatens Noncompete Agreements

The state legislature’s Labor and Public Employees Committee is holding a public hearing March 4 on legislation with potentially negative impacts for Connecticut employers.

SB 906 invalidates all noncompete agreements on July 1, 2021 if any of the following apply:

• The employee is a nonexempt (hourly) employee
• The employee is an exempt employee (salaried) who earns less than three times the minimum wage ($93,600 per year for a full-time employee at $15 an hour)
• The independent contractor earns less than five times the minimum wage ($75 per hour at $15 hour)
• The employment relationship ended because the employee was terminated, regardless of the reason, or if the employee leaves employment because they believe they had good cause

This bill could cause economic harm that comes from the loss of trade secrets, proprietary information, client lists, source codes, or other confidential information.

It could also invalidate employer contracts with third party vendors who have access to critical information that could be sold to competitors.

While noncompete agreements are not appropriate for some sectors, they will be invalidated in virtually all industries if SB 906 passes. 

Contact your state lawmakers and tell them why noncompete agreements are important to your business.

For more information, contact CBIA’s Eric Gjede (860.244.1931) | @egjede