The bill declares that a restrictive employment agreement or
covenant not to compete that restricts the right of any person to receive compensation for performance of labor for any employer is void, with certain exceptions.
Additionally, if the employer provides proper notice of the
restrictive employment agreement or covenant not to compete to the employee or prospective employee, the following agreements or covenants are not prohibited:
•
A provision providing for recovery of the expense of educating and training an employee who has served an employer for a period of less than 2 years, unless the education and training was primarily for the benefit or convenience of the employer;
•
A reasonable confidentiality provision relevant to the employer's business that does not prohibit disclosure of information that arises from the employee's general training, knowledge, skill, or experience, whether gained on the job or otherwise, or information that is readily ascertainable to the public; and
•
Agreements or covenants with a person earning annual cash compensation greater than the threshold amount for highly compensated employees.
The bill limits choice of law and choice of venue provisions in
restrictive employment agreements and covenants not to compete.
The bill prohibits an employer from entering into, presenting to an
employee or prospective employee as a term of employment, or attempting to enforce any restrictive employment agreement or covenant not to compete that is void under the bill. An employer who violates this provision is subject to a penalty of $5,000 for each employee or prospective employee, injunctive relief, and actual damages.
