Prohibiting employers from entering into noncompete agreements with employees under specified circumstances, and including applicability provisions

This bill prohibits an employer from requiring an employee to enter into a noncompete agreement. The bill provides that such agreements entered into on or after the effective date of the bill shall be void and unenforceable. The bill defines “noncompete agreement” as an agreement between an employer and an employee that restricts the employee from performing work for a different employer for a specified period of time, work in a specified geographical area, or work for a different employer that is similar to the employee’s work for the employer who is a party to the agreement. An employer may enter into a noncompete agreement with an employee where financial loss or trade secrets are at risk. The bill provides that financial loss includes a potentially significant negative financial impact or consequence incurred by an employer attributable to the loss of an employee’s services or work product, and does not include resources used to train an employee. The bill allows an employer to enter into a nonsolicitation agreement with the employee, by which the employee must refrain from wrongly or fraudulently attempting to sell, convey, or distribute employer property, including confidential information, with outside parties. The bill applies to noncompete agreements entered into on or after the effective date of the bill.