OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sHB-7196
AN ACT CONCERNING LIMITATIONS ON THE USE OF
NONCOMPETE AGREEMENTS.
Primary Analyst: CR 3/31/25
Contributing Analyst(s): ME, LG, WL, JP, BP
Reviewer: MM
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 26 $ FY 27 $
Resources of the General Fund GF - Potential
Revenue Gain
See Below See Below
Note: GF=General Fund
Municipal Impact: None
Explanation
The bill, which sets limits on the use of covenant not to compete
provisions in employment contracts and allows workers and the
Attorney General to bring an action in Superior Court over alleged
violations, results in a potential revenue gain to the General Fund to the
extent that the court assesses a civil penalty because of such an action.
1
The court system disposes of over 250,000 cases annually and the
number of cases is not anticipated to be great enough to need additional
resources.
The bill has no cost impact to the state or municipalities as employers.
To the extent that either the state or municipalities enter into
noncompete contracts with their employees, the bill is not anticipated to
change the cost of any such contract.
1
Under the bill, violators are not liable to the Labor Department for any civil penalties
imposed under the state's wage laws. 2025HB-07196-R000367-FN.DOCX Page 2 of 2
The Out Years
The annualized ongoing fiscal impact identified above would
continue into the future subject to the number of civil penalties assessed.