| 18 | | - | Section 1. (Effective from passage) The Labor Commissioner shall 1 |
|---|
| 19 | | - | conduct a study of the rights of employees in this state. Not later than 2 |
|---|
| 20 | | - | January 1, 2022, the commissioner shall report the results of the study, 3 |
|---|
| 21 | | - | in accordance with the provisions of section 11-4a of the general statutes, 4 |
|---|
| 22 | | - | to the joint standing committee of the General Assembly having 5 |
|---|
| 23 | | - | cognizance of matters relating to labor. Such report may include the 6 |
|---|
| 24 | | - | commissioner's recommendations for legislation regarding the rights of 7 |
|---|
| 25 | | - | employees in this state.8 |
|---|
| 23 | + | Section 1. (NEW) (Effective from passage) (a) For purposes of this 1 |
|---|
| 24 | + | section: 2 |
|---|
| 25 | + | (1) "Base salary and benefits" means (A) wages, as defined in section 3 |
|---|
| 26 | + | 31-71a of the general statutes, earned over the course of the prior 4 |
|---|
| 27 | + | calendar year, without consideration of any overtime or bonus 5 |
|---|
| 28 | + | compensation, and (B) health insurance benefits and other fringe 6 |
|---|
| 29 | + | benefits received by an employee over the course of the prior calendar 7 |
|---|
| 30 | + | year; 8 |
|---|
| 31 | + | (2) "Employee" includes any person suffered or permitted to work by 9 |
|---|
| 32 | + | an employer; 10 |
|---|
| 33 | + | (3) "Employer" has the same meaning as provided in section 31-71a 11 |
|---|
| 34 | + | of the general statutes; 12 |
|---|
| 35 | + | (4) "Covenant not to compete" means a contract, provision or 13 |
|---|
| 36 | + | agreement that restrains an employee from engaging in any lawful 14 Raised Bill No. 6379 |
|---|
| 37 | + | |
|---|
| 38 | + | |
|---|
| 39 | + | |
|---|
| 40 | + | LCO No. 2743 2 of 3 |
|---|
| 41 | + | |
|---|
| 42 | + | profession, occupation, trade, calling or business of any kind in any 15 |
|---|
| 43 | + | geographic area of the state for any period of time after the termination 16 |
|---|
| 44 | + | of employment; and 17 |
|---|
| 45 | + | (5) "Separation agreement" means an agreement accompanying the 18 |
|---|
| 46 | + | termination or separation of employment without cause in which the 19 |
|---|
| 47 | + | employee releases claims or potential claims against the employer. 20 |
|---|
| 48 | + | (b) Except as provided in section 31-50a or 31-50b of the general 21 |
|---|
| 49 | + | statutes, an employer may obtain from an employee a covenant not to 22 |
|---|
| 50 | + | compete only if it (1) does not restrict the employee's competitive 23 |
|---|
| 51 | + | activities for a period of more than one year following the termination 24 |
|---|
| 52 | + | or separation of the employee; (2) is necessary to protect a legitimate 25 |
|---|
| 53 | + | business interest of the employer; (3) is reasonably limited in time, 26 |
|---|
| 54 | + | geographic scope and employment restrictions as necessary to protect 27 |
|---|
| 55 | + | such business interest; (4) is consistent with this section, other laws of 28 |
|---|
| 56 | + | this state and public policy; and (5) is entered into by an employee who 29 |
|---|
| 57 | + | receives compensation at an hourly rate of more than twice the 30 |
|---|
| 58 | + | minimum fair wage as defined in section 31-58 of the general statutes. 31 |
|---|
| 59 | + | The party seeking to enforce a covenant not to compete shall have the 32 |
|---|
| 60 | + | burden of proof in any proceeding. 33 |
|---|
| 61 | + | (c) A covenant not to compete that is entered into, amended, 34 |
|---|
| 62 | + | extended or renewed on or after July 1, 2021, shall not be enforceable 35 |
|---|
| 63 | + | against any employee if (1) such covenant was not made in anticipation 36 |
|---|
| 64 | + | of a sale of the good will of a business or all of the seller's ownership 37 |
|---|
| 65 | + | interest in a business, or as part of a partnership or ownership 38 |
|---|
| 66 | + | agreement and such contract or agreement expires and is not renewed, 39 |
|---|
| 67 | + | unless, prior to such expiration, the employer makes a bona fide offer to 40 |
|---|
| 68 | + | renew the contract on the same or similar terms and conditions; (2) the 41 |
|---|
| 69 | + | employment or contractual relationship is terminated by the employer; 42 |
|---|
| 70 | + | or (3) the employment or contractual relationship is terminated by the 43 |
|---|
| 71 | + | employee for good cause attributable to the employer. 44 |
|---|
| 72 | + | (d) A covenant not to compete that meets the requirements of 45 |
|---|
| 73 | + | subsections (b), (c) and (e) of this section shall not be invalid under this 46 Raised Bill No. 6379 |
|---|
| 74 | + | |
|---|
| 75 | + | |
|---|
| 76 | + | |
|---|
| 77 | + | LCO No. 2743 3 of 3 |
|---|
| 78 | + | |
|---|
| 79 | + | section based upon its duration of more than one year, but not longer 47 |
|---|
| 80 | + | than two years, following the termination of employment if it is a part 48 |
|---|
| 81 | + | of an employment agreement or a separation agreement under which 49 |
|---|
| 82 | + | the employer agrees to continue to compensate the employee with the 50 |
|---|
| 83 | + | employee's base salary and benefits for a period of not less than one year 51 |
|---|
| 84 | + | following the termination of employment. 52 |
|---|
| 85 | + | (e) Each covenant not to compete that is entered into, amended, 53 |
|---|
| 86 | + | extended or renewed on or after July 1, 2021, shall (1) be provided to the 54 |
|---|
| 87 | + | employee not less than ten business days prior to the date of signing; (2) 55 |
|---|
| 88 | + | expressly state that the employee has the right to consult with counsel 56 |
|---|
| 89 | + | prior to signing; and (3) be signed by the employee and the employer. 57 |
|---|
| 90 | + | (f) The remaining provisions of any contract or agreement that 58 |
|---|
| 91 | + | includes a covenant not to compete that is rendered void and 59 |
|---|
| 92 | + | unenforceable, in whole or in part, under the provisions of this section 60 |
|---|
| 93 | + | shall remain in full force and effect, including provisions that require 61 |
|---|
| 94 | + | the payment of damages resulting from any injury suffered by reason of 62 |
|---|
| 95 | + | termination or separation of employment. 63 |
|---|
| 96 | + | (g) The provisions of this section shall apply to agreements or 64 |
|---|
| 97 | + | covenants entered into, renewed or extended on or after June 30, 2021. 65 |
|---|