LCO \\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-06594-R01-
HB.docx
1 of 8
General Assembly Substitute Bill No. 6594
January Session, 2023
AN ACT CONCERNING NONCOMPETE AGREEMENTS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective July 1, 2023) As used in this section and 1
sections 2 to 4, inclusive, of this act: 2
(1) "Base salary and benefits" means (A) wages, as defined in section 3
31-71a of the general statutes, earned over the course of the prior 4
calendar year, excluding any overtime or bonus compensation, and (B) 5
health insurance benefits and other fringe benefits received by an 6
employee over the course of the prior calendar year; 7
(2) "Covenant not to compete" means a contract, provision or other 8
agreement entered into, amended, extended or renewed on or after 9
July 1, 2023, that restrains, or imposes penalties on, a worker from 10
engaging in any lawful profession, occupation, trade, calling or 11
business of any kind in any geographic area of the state for any period 12
of time after separation from employment, but does not mean (A) a 13
nonsolicitation agreement, provided such agreement (i) does not 14
restrict a worker's activities for more than one year, and (ii) is no more 15
restrictive than necessary in duration, geographic scope, type of work 16
and type of employer, (B) a nondisclosure or confidentiality 17
agreement, (C) a contract, provision or other agreement in which an 18
employee agrees to not reapply for employment with an employer 19 Substitute Bill No. 6594
LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-06594-
R01-HB.docx }
2 of 8
after being terminated by such employer, (D) any covenant not to 20
compete, pursuant to sections 20-14p, 20-681 and 30-50b of the general 21
statutes, or (E) any contract, provision or other agreement made (i) in 22
anticipation of a sale of the goodwill of a business or all of the seller's 23
ownership interest in a business, or (ii) as part of a partnership or 24
ownership agreement; 25
(3) "Employee" means any individual employed or permitted to 26
work by an employer; 27
(4) "Employer" has the same meaning as provided in section 31-71a 28
of the general statutes; 29
(5) "Exclusivity agreement" means a contract, provision or other 30
agreement entered into, amended, extended or renewed on or after 31
July 1, 2023, that restrains a worker from, or imposes a penalty on, a 32
worker for being simultaneously employed by another employer, 33
working as an independent contractor or being self-employed; 34
(6) "Exempt employee" means an employee not included in the 35
definition of "employee" in section 31-58 of the general statutes; 36
(7) "Legitimate business interest" means an interest in (A) the 37
protection of trade secrets or confidential information that does not 38
qualify as a trade secret, or (B) preserving established goodwill with 39
the employer's customers; 40
(8) "Minimum fair wage" has the same meaning as provided in 41
section 31-58 of the general statutes; 42
(9) "Monetary compensation" means (A) wages, as defined in 43
section 31-71a of the general statutes, earned over the course of the 44
prior calendar year or portion thereof, for which the employee was 45
employed, annualized based on the period of employment and 46
calculated as of (i) the date that enforcement of the covenant not to 47
compete is sought, or (ii) the date of separation from employment, 48
whichever is earlier, and (B) payments made to independent 49 Substitute Bill No. 6594
LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-06594-
R01-HB.docx }
3 of 8
contractors based on services rendered, annualized based on the 50
period during which the independent contractor provided services and 51
calculated as of (i) the date that enforcement of the covenant not to 52
compete is sought, or (ii) the date of separation from employment, 53
whichever is earlier; 54
(10) "Nonsolicitation agreement" means (A) a contract, provision or 55
other agreement between an employer and an employee that prohibits 56
such employee, upon separation of employment, from soliciting (i) any 57
employee of the employer to leave the employer, or (ii) any customer 58
of the employer to cease or reduce the extent to which it is doing 59
business with the employer, or (B) a contract, provision or other 60
agreement between an employer and a customer of such employer that 61
prohibits such customer from soliciting an employee of the employer 62
to cease or reduce the extent to which such employee is doing business 63
with the employer; 64
(11) "Separation from employment" means the date in which an 65
employment or independent contractor relationship ends; and 66
(12) "Worker" means an employee or an independent contractor. 67
Sec. 2. (NEW) (Effective July 1, 2023) (a) No covenant not to compete 68
shall be enforceable against a worker unless all of the following 69
conditions are met: 70
(1) The covenant not to compete restricts such worker's competitive 71
activities for a period of not more than one year following the 72
separation of employment; 73
(2) The covenant not to compete is necessary to protect a legitimate 74
business interest of the employer and such legitimate business interest 75
could not reasonably be protected by less restrictive means, including, 76
but not limited to, a nondisclosure agreement, nonsolicitation 77
agreement or reliance on the protections provided by the provisions of 78
chapter 625 of the general statutes; 79 Substitute Bill No. 6594
LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-06594-
R01-HB.docx }
4 of 8
(3) The covenant not to compete is no more restrictive than 80
necessary to protect a legitimate business interest in terms of the 81
duration, geographic scope, type of work and type of employer of the 82
covenant not to compete; 83
(4) The worker is an exempt employee; 84
(5) A written copy of the covenant not to compete is provided to the 85
worker not later than ten business days prior to (A) the worker's 86
deadline to accept an offer of employment or to enter into an 87
independent contractor relationship, or (B) the date the covenant not to 88
compete is signed, whichever is earlier; 89
(6) The covenant not to compete contains a statement of the 90
worker's rights under the covenant not to compete, provided such 91
statement includes the following: (A) Not all covenants not to compete 92
are enforceable, (B) a covenant not to compete for a worker whose 93
monetary compensation is less than the amount described in 94
subsection (b) of this section is illegal, (C) a worker may contact the 95
Attorney General if such worker believes they are subject to an illegal 96
covenant not to compete, and (D) a worker has the right to consult 97
with counsel prior to signing a covenant not to compete; 98
(7) The covenant not to compete is signed by the worker and the 99
employer or contractor separately from any other agreement 100
establishing the relationship between the worker and the employer or 101
contractor; 102
(8) If the covenant not to compete is added to an existing 103
employment or independent contractor relationship, the covenant not 104
to compete is supported by sufficient consideration and is not solely 105
the continuation of such employment or contractor relationship; 106
(9) The employment or contract relationship was not terminated by 107
the worker for good cause attributable to the employer or contractor; 108
(10) The covenant not to compete does not require a worker to 109 Substitute Bill No. 6594
LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-06594-
R01-HB.docx }
5 of 8
submit to adjudication in a forum outside of this state or otherwise 110
deprive such worker of the protections or benefits of this section; and 111
(11) The covenant not to compete does not unreasonably interfere 112
with the public interest and is consistent with the provisions of this 113
section, other laws of this state and public policy. 114
(b) No covenant not to compete shall be enforceable against a 115
worker if such worker is (1) an employee whose monetary 116
compensation is less than three times the minimum fair wage, or (2) an 117
independent contractor whose monetary compensation is less than five 118
times such minimum fair wage. 119
(c) A covenant not to compete shall be presumed unenforceable if 120
such covenant applies to (1) geographic areas in which a worker 121
neither provided services nor had a material presence or influence in 122
during the last two years of employment, or (2) types of work that the 123
worker did not perform during the last two years of employment. 124
(d) Notwithstanding the provisions of subdivision (1) of subsection 125
(a) of this section, a covenant not to compete shall be enforceable for a 126
period of not longer than two years following separation from 127
employment if such covenant not to compete is a part of an agreement 128
under which the worker is compensated with the worker's base salary 129
and benefits, minus any outside compensation, for the entire duration 130
of such covenant not to compete. 131
Sec. 3. (NEW) (Effective July 1, 2023) (a) Except as otherwise 132
provided in subsection (b) of this section, no employer or contractor 133
may request or require a worker to sign or agree to an exclusivity 134
agreement, unless such worker is (1) an exempt employee whose 135
monetary compensation is more than three times the minimum fair 136
wage, or (2) an independent contractor whose monetary compensation 137
is more than five times the minimum fair wage. 138
(b) An employer or contractor may request or require a worker to 139
sign an exclusivity agreement if such worker's additional employment, 140 Substitute Bill No. 6594
LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-06594-
R01-HB.docx }
6 of 8
work as an independent contractor or being self-employed would (1) 141
imperil the safety of such worker, such worker's coworkers or the 142
public, or (2) substantially interfere with the reasonable and normal 143
scheduling expectations for such worker, except on-call shift 144
scheduling shall not be considered a reasonable scheduling 145
expectation for the purposes of this subsection. 146
(c) The provisions of this section shall not be construed to alter any 147
obligations of an employee to an employer under existing law, 148
including, but not limited to, the common law duty of loyalty, laws 149
preventing conflicts of interest and any corresponding policies 150
addressing such obligations. 151
Sec. 4. (NEW) (Effective July 1, 2023) (a) (1) The party seeking to 152
enforce a covenant not to compete or an exclusivity agreement against 153
a worker shall have the burden of proof in any enforcement 154
proceeding for such covenant not to compete or exclusivity agreement. 155
(2) The party required to compensate a worker in an agreement 156
described in subsection (d) of section 2 of this act shall have the burden 157
of proof in any proceeding to cease compensating a worker. 158
(b) No court may modify a covenant not to compete that violates the 159
provisions of sections 1 to 3, inclusive, of this act for purposes of 160
enforcing such covenant not to compete. 161
(c) If a covenant not to compete or an exclusivity agreement is held 162
unenforceable under sections 1 to 3, inclusive, of this act, any severable 163
provision of a contract or other agreement unrelated to such covenant 164
not to compete shall remain in full force and effect, including, but not 165
limited to, any provisions that require the payment of damages 166
resulting from any injury suffered by separation of employment. 167
(d) The Attorney General may bring a civil action in Superior Court 168
on behalf of any worker aggrieved by a violation of any provision of 169
sections 1 to 3, inclusive, of this act for any and all relief provided in 170
this section. 171 Substitute Bill No. 6594
LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-06594-
R01-HB.docx }
7 of 8
(e) If a court or an arbitrator determines that a covenant not to 172
compete or an exclusivity agreement is in violation of sections 1 to 3, 173
inclusive, of this act, the violator shall be liable for (1) the aggrieved 174
worker's actual damages, or (2) a penalty of five thousand dollars, 175
whichever is greater, in addition to reasonable attorney's fees, 176
expenses and court costs. 177
(f) No employer, officer, agent or other person who violates any 178
provision of this section shall be liable for an additional penalty under 179
section 31-69 of the general statutes. 180
Sec. 5. Section 31-50a of the general statutes is repealed and the 181
following is substituted in lieu thereof (Effective July 1, 2023): 182
(a) No employer may require any person employed in the 183
classification 339032 of the standard occupational classification system 184
of the Bureau of Labor Statistics of the United States Department of 185
Labor to enter into an agreement prohibiting such person from 186
engaging in the same or a similar job, at the same location at which the 187
employer employs such person, for another employer or as a self-188
employed person, unless the employer proves that such person has 189
obtained trade secrets, as defined in subsection (d) of section 35-51, of 190
the employer. 191
(b) (1) Any person who is aggrieved by a violation of this section 192
may bring a civil action in the Superior Court to recover damages and 193
for such injunctive and equitable relief as the court deems appropriate. 194
(2) The Labor Commissioner may request the Attorney General to 195
bring an action in the superior court for the judicial district of Hartford 196
for restitution on behalf of any person injured by any violation of this 197
section and for such injunctive or equitable relief as the court deems 198
appropriate. 199
(c) The provisions of this section shall apply to agreements entered 200
into, renewed or extended on or after October 1, 2007, and before July 201
1, 2023. 202 Substitute Bill No. 6594
LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-06594-
R01-HB.docx }
8 of 8
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2023 New section
Sec. 2 July 1, 2023 New section
Sec. 3 July 1, 2023 New section
Sec. 4 July 1, 2023 New section
Sec. 5 July 1, 2023 31-50a
Statement of Legislative Commissioners:
In Section 4(e), "is in violation of" was added for clarity.
LAB Joint Favorable Subst.