Bill Text: HI SB1054 | 2024 | Regular Session | Introduced

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Bill Title: Relating To Non-compete Clauses.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Introduced - Dead) 2023-12-11 - Carried over to 2024 Regular Session. [SB1054 Detail]

Download: Hawaii-2024-SB1054-Introduced.html

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THE SENATE	S.B. NO.	1054
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII

A BILL FOR AN ACT

 

 

relating to non-compete clauses.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that non-compete clauses in employment contracts pose multiple disadvantages for employers and employees alike.  Employees that have signed a non-compete clause are prevented from changing jobs to other employers in the same field.  This hinders upward mobility, especially for low-wage earners, and subjects them to poor working conditions as they are unable to advocate for or move to a better job.  Potential employees may also need to seek expensive legal assistance when signing a non-compete contract.

     The legislature further finds that employers who require a non-compete clause in an employment contract can be less attractive to potential new employees due to the clause's limitation on future job prospects.  Employers also incur legal expenses for enforcing non-compete clauses.

     The legislature also finds that prohibiting non-compete clauses could boost wages and narrow pay gaps experienced by minorities and women.  Prohibiting non-compete clauses also encourages employers to focus on employee retention and satisfaction.  A 2019 study from the Ross School of Business and the United States Census Bureau Center for Economic Studies found that Hawaii's 2015 prohibition on non-compete clauses for technology workers increased mobility by eleven per cent and raised new-hire wages by four per cent.

     The purpose of this Act is to void existing and prohibit future non-compete clauses for employees of a restaurant, retail store, newspaper, magazine, news agency, press association, wire service, or radio or television transmission station or network.

     SECTION 2.  Section 480-4, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

     "(d)  Except as provided in subsection (c)(4), it shall be prohibited to include a [noncompete] non-compete clause or a [nonsolicit] non-solicit clause in any employment contract relating to an employee of a technology business[.], restaurant, retail store, newspaper, magazine, news agency, press association, wire service, or radio or television transmission station or network.  The clause shall be void and of no force and effect.

     As used in this subsection:

     "Information technology development" means the design, integration, deployment, or support services for software.

     ["Noncompete] "Non-compete clause" means a clause in an employment contract that prohibits an employee from working in a specific geographic area for a specific period of time after leaving employment with the employer.

     ["Nonsolicit] "Non-solicit clause" means a clause in an employment contract that prohibits an employee from soliciting employees of the employer after leaving employment with the employer.

     "Restaurant" shall have the same meaning as in section 321‑30.3

     "Software development" means the creation of coded computer instructions.

     "Technology business" means a trade or business that derives the majority of its gross income from the sale or license of products or services resulting from its software development or information technology development, or both.  A "technology business" excludes any trade or business that is considered by standard practice as part of the broadcast industry or any telecommunications carrier, as defined in section 269-1, that holds a franchise or charter enacted or granted by the legislative or executive authority of the State or its predecessor governments."

     SECTION 3.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Employment Covenants or Agreements; Non-compete Clause; Labor; Employment Contracts; Non-solicit Clause

 

Description:

Prohibits non-compete and non-solicit clauses in employment contracts relating to employees of a restaurant, retail store, newspaper, magazine, news agency, press association, wire service, or radio or television transmission station or network.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.