Texas 2019 - 86th Regular

Texas House Bill HB2960 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R13256 LED-D
2	2	By: Hinojosa H.B. No. 2960
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a prohibition against covenants not to compete for
8	8	certain low-wage employees.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 15.50(a), Business & Commerce Code, is
11	11	amended to read as follows:
12	12	(a) Notwithstanding Section 15.05 of this code, and subject
13	13	to any applicable provision of Subsection (b), a covenant not to
14	14	compete is enforceable if it is ancillary to or part of an otherwise
15	15	enforceable agreement at the time the agreement is made to the
16	16	extent that it contains limitations as to time, geographical area,
17	17	and scope of activity to be restrained that are reasonable and do
18	18	not impose a greater restraint than is necessary to protect the
19	19	goodwill or other business interest of the promisee, except as
20	20	provided by Section 15.501.
21	21	SECTION 2. Subchapter E, Chapter 15, Business & Commerce
22	22	Code, is amended by adding Section 15.501 to read as follows:
23	23	Sec. 15.501. PROHIBITION AGAINST COVENANT NOT TO COMPETE
24	24	FOR CERTAIN LOW-WAGE EMPLOYEES. (a) In this section:
25	25	(1) "Employee" means an individual who is employed by
26	26	an employer for compensation.
27	27	(2) "Employer" means a person who employs one or more
28	28	employees. The term does not include a public employer.
29	29	(b) This section applies only to an employee who earns not
30	30	more than the greater of:
31	31	(1) the federal minimum wage under Section 6, Fair
32	32	Labor Standards Act of 1938 (29 U.S.C. Section 206); or
33	33	(2) $15.00 an hour.
34	34	(c) An employer may not require an employee to whom this
35	35	section applies to enter into a covenant not to compete that
36	36	restricts the employee from performing work:
37	37	(1) for another employer for a specified period of
38	38	time;
39	39	(2) in a specified geographical area; or
40	40	(3) for another employer similar to the employee's
41	41	work for the current employer.
42	42	(d) A covenant not to compete described by Subsection (c) is
43	43	void and unenforceable.
44	44	(e) Section 15.51 does not apply to a covenant not to
45	45	compete described by Subsection (c).
46	46	SECTION 3. Section 15.52, Business & Commerce Code, is
47	47	amended to read as follows:
48	48	Sec. 15.52. PREEMPTION OF OTHER LAW. The criteria for
49	49	enforceability of a covenant not to compete provided by Sections
50	50	[Section] 15.50 and 15.501 of this code and the procedures and
51	51	remedies in an action to enforce a covenant not to compete provided
52	52	by Section 15.51 of this code are exclusive and preempt any other
53	53	criteria for enforceability of a covenant not to compete or
54	54	procedures and remedies in an action to enforce a covenant not to
55	55	compete under common law or otherwise.
56	56	SECTION 4. The change in law made by this Act applies only
57	57	to a covenant entered into on or after the effective date of this
58	58	Act. A covenant entered into before the effective date of this Act
59	59	is governed by the law in effect at the time the covenant was
60	60	entered into, and the former law is continued in effect for that
61	61	purpose.
62	62	SECTION 5. This Act takes effect September 1, 2019.