Covenants not to compete in employment contracts

What it would have done

Summary by the Legislative Reference Bureau, the Legislature's nonpartisan drafting office. It's their wording, not ours.

Under current law, a restrictive covenant in an employment contract that prohibits an assistant, servant, or agent from competing with his or her employer or principal during the term of the employment or agency, or after the termination of the employment or agency, within a specified territory and during a specified time is lawful and enforceable if the restrictions imposed are reasonably necessary for the protection of the employer or principal. Such a covenant that imposes an unreasonable restraint is illegal, void, and unenforceable even as to any part of the covenant or performance that would be a reasonable restraint.

This bill makes most such covenants illegal, void, and unenforceable after the termination of employment or agency. A nondisclosure agreement related to personal information of the employer or principal or the customers of the employer or principal or a restrictive covenant prohibiting the unauthorized use by a former employee or agent of a customer list or intellectual property owned or licensed by the employer or principal is not illegal, void, or unenforceable under the bill.

Who's behind it

27 representatives are its authors⁠. All 27 are Democrats.

14 more lawmakers signed on in support⁠.