PA 07-237—sHB 6989

Labor and Public Employees Committee

Judiciary Committee

AN ACT CONCERNING NONCOMPETE AGREEMENTS

SUMMARY: This act establishes prohibitions regarding non-competition agreements in employment agreements with broadcast employees and, under certain circumstances, security guards. A non-competition agreement is an agreement between an employer and an employee that bars the employee from working in a particular occupation, business, or geographic area for a certain time after ending employment with the employer. Courts have upheld non-competition agreements if their restrictions are reasonable.

The act prohibits a contract for services between a broadcasting industry employer and a broadcast employee from containing a provision that the broadcast employee:

1. refrain from working in a specified geographic area for a specified period after ending employment;

2. disclose the terms or conditions of an employment offer, or the existence of one, from another broadcasting industry employer following the expiration of the employment contract; or

3. agree to a subsequent contract or an extension or renewal of the existing one on the same terms and conditions offered by a prospective employer.

The act applies to agreements between (1) “broadcast industry employers,” defined as owners or operators of broadcast television or radio stations, including associated broadcast entities but excluding cable stations and networks and (2) their employees other than those primarily performing sales and management functions.

The act allows someone to sue in Superior Court for damages, court costs, and reasonable attorney's fees for a violation.

The act also prohibits an employer from requiring an employee who is a security guard to agree to a non-competition agreement if (1) it prohibits the employee from having the same or a similar job at the same location and (2) the job is for another employer or as a self-employed person. This prohibition does not apply if the employer proves that the employee has obtained the employer's trade secrets.

The act allows someone to sue under this provision in Superior Court for damages, an injunction, and equitable relief, as the court deems appropriate, for violations. It also allows the labor commissioner to ask the attorney general to sue in the Hartford Superior Court for restitution on behalf of an injured person, injunctions, and equitable relief, as the court deems appropriate.

EFFECTIVE DATE: For agreements regarding security guards, October 1, 2007 and applicable to agreements entered into, renewed, or extended on and after that date. For agreements regarding broadcast industry employees, July 1, 2007 and applicable to agreements entered into, renewed, or extended on and after that date.

DEFINITIONS

The act defines “associated broadcast entities” as entities providing reporting services to broadcast television or radio stations, including subcontractors that provide weather, sports, traffic, and other reports for broadcast or cablecast.

A “broadcast television or radio station” is an entity owned or operated by holding a Federal Communications Commission television or radio license or by operating a station through a local service, sales, marketing, or outsourcing agreement.

A “cable network” is an entity distributing programming to at least two local cable systems.

A “cable station” is an entity that produces or transmits programming to at least one local cable system.

A “local cable system” is a cable system, as defined in federal law, operating in the state.

BACKGROUND

Security Guards

The act refers to Bureau of Labor Statistics standard occupational class 33-9032. This is the security guards classification, which is described as someone who “guards, patrols, or monitors premises to prevent theft, violence, or infractions of rules. ”

Case Law on Non-Competition Agreements

Courts uphold non-competition agreements if they are reasonable in terms of:

1. length of time,

2. geographic area covered,

3. fairness of protection given the employer,

4. extent of restraint on the employee's opportunity to pursue his or her occupation, and

5. extent of interference with the public's interests (Robert S. Weiss & Associates, Inc. v. Wiederlight, 208 Conn. 525 (1988)).

Trade Secrets

The law defines a trade secret as information, such as a formula, device, process, or customer list, that (1) has economic value because it is not generally known and not readily ascertainable by others who could benefit from it and (2) is the subject of reasonable efforts to keep it secret (CGS § 35-51(d)).

OLR Tracking: CR: SC: JL: RO