Bill Text: IA HF31 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act prohibiting employers from entering into noncompete agreements with employees under specified circumstances, and including applicability provisions.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced) 2023-01-12 - Introduced, referred to Labor and Workforce. H.J. 77. [HF31 Detail]
Download: Iowa-2023-HF31-Introduced.html
House
File
31
-
Introduced
HOUSE
FILE
31
BY
WILLS
A
BILL
FOR
An
Act
prohibiting
employers
from
entering
into
noncompete
1
agreements
with
employees
under
specified
circumstances,
and
2
including
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
NEW
SECTION
.
96A.1
Definitions.
1
As
used
in
this
chapter,
unless
the
context
otherwise
2
requires:
3
1.
“Employee”
means
a
natural
person
who
is
employed
in
this
4
state
for
wages
by
an
employer.
5
2.
“Employer”
means
a
person,
as
defined
in
chapter
4,
who
6
in
this
state
employs
for
wages
an
employee.
7
3.
“Financial
loss”
means
a
potentially
significant
negative
8
financial
impact
or
consequence
incurred
by
an
employer
9
attributable
to
the
loss
of
an
employee’s
services
or
work
10
product.
“Financial
loss”
does
not
include
resources
used
in
11
the
course
of
employee
training.
12
4.
“Noncompete
agreement”
means
an
agreement
between
an
13
employer
and
an
employee
that
restricts
the
employee
from
14
performing
any
of
the
following:
15
a.
Working
for
a
different
employer
for
a
specified
period
16
of
time.
17
b.
Working
for
a
different
employer
in
a
specified
18
geographical
area.
19
c.
Working
for
a
different
employer
that
is
similar
to
20
the
employee’s
work
for
the
employer
who
is
a
party
to
the
21
agreement.
22
5.
“Solicit”
or
“solicitation”
means
an
employee
wrongly
or
23
fraudulently
attempting
to
sell,
convey,
or
distribute
employer
24
property,
including
confidential
lists
and
trade
secrets.
25
Sec.
2.
NEW
SECTION
.
96A.2
Noncompete
agreements
with
26
employees
——
prohibition.
27
1.
An
employer
shall
not
require
an
employee
to
enter
into
28
a
noncompete
agreement
except
where
employer
financial
loss
or
29
employer
trade
secrets
are
at
risk.
30
2.
An
employer
may
require
that
the
employee
enter
into
a
31
nonsolicitation
agreement.
32
3.
A
noncompete
agreement
entered
into
between
an
employer
33
and
an
employee
on
or
after
the
effective
date
of
this
Act
34
shall
be
void
and
unenforceable.
35
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31
Sec.
3.
APPLICABILITY.
This
Act
applies
to
noncompete
1
agreements
entered
between
an
employer
and
an
employee
on
or
2
after
the
effective
date
of
this
Act.
3
EXPLANATION
4
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
5
the
explanation’s
substance
by
the
members
of
the
general
assembly.
6
This
bill
prohibits
an
employer
from
requiring
an
employee
7
to
enter
into
a
noncompete
agreement.
The
bill
provides
that
8
such
agreements
entered
into
on
or
after
the
effective
date
of
9
the
bill
shall
be
void
and
unenforceable.
10
The
bill
defines
“noncompete
agreement”
as
an
agreement
11
between
an
employer
and
an
employee
that
restricts
the
employee
12
from
performing
work
for
a
different
employer
for
a
specified
13
period
of
time,
work
in
a
specified
geographical
area,
or
work
14
for
a
different
employer
that
is
similar
to
the
employee’s
work
15
for
the
employer
who
is
a
party
to
the
agreement.
16
An
employer
may
enter
into
a
noncompete
agreement
with
an
17
employee
where
financial
loss
or
trade
secrets
are
at
risk.
18
The
bill
provides
that
financial
loss
includes
a
potentially
19
significant
negative
financial
impact
or
consequence
incurred
20
by
an
employer
attributable
to
the
loss
of
an
employee’s
21
services
or
work
product,
and
does
not
include
resources
used
22
to
train
an
employee.
23
The
bill
allows
an
employer
to
enter
into
a
nonsolicitation
24
agreement
with
the
employee,
by
which
the
employee
must
25
refrain
from
wrongly
or
fraudulently
attempting
to
sell,
26
convey,
or
distribute
employer
property,
including
confidential
27
information,
with
outside
parties.
28
The
bill
applies
to
noncompete
agreements
entered
into
on
or
29
after
the
effective
date
of
the
bill.
30
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