Senate bill limits non-compete agreements to three months
Antonio Caban/SHNS
The senate will debate a new bill limiting the use of non-compete agreements.
The Senate on Thursday will debate a redrafted version of the House's bill to limit the use of non-compete agreements in the private sector that would restrict the duration of such agreements to no more than three months.
Lawmakers are hoping to compromise this session on legislation that would limit the use of non-competes, which are commonly used in the technology and financial sectors to prevent employees from bringing proprietary information to competitors, but have been criticized for being abused by some employers and suffocating innovation.
The House bill, passed late last month, limited the length of non-compete agreements in most circumstances to 12 months. Both branches have proposed to prohibit employers from enforcing the agreements on minimum wage workers, college students or employees 18 and younger.
The Senate bill (S 2418) also diverges from the House in its proposed enforcement of so-called “garden leave” policies that would entitle employees that leave their jobs to collect some form of compensation while they are restricted from taking new employment in their fields.
While the House bill guaranteed that workers leaving a job be paid half of their salary for the duration of their restricted period, the bill released by the Senate Rules Committee on Monday says that employers would have to pay 100 percent of the employee's annualized salary during the restricted period.
The House did allow for "a mutually-agreed upon consideration" as an alternative to salary payments if both sides agree, but the Senate's proposal stipulates that any such consideration would have to be negotiated within 30 days following the employee’s termination and be of equal or greater value than their full pro-rated salary.
Senators have until 5 p.m. on Tuesday to file amendments.
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