March 4, 2021 Labor and Public Employees Cmte, SB 906
Public Hearing Testimony of
Kurt Westby, Commissioner
Department of Labor
Labor and Public Employees Committee
March 4, 2021
Good Morning Senator Kushner, Representative Porter, Senator Sampson, Representative Arora and members of the Labor and Public Employees Committee. Thank you for the opportunity to provide you with testimony regarding Senate Bill 906, AN ACT CONCERNING NON-COMPETE AGREEMENTS. My name is Kurt Westby and I am the Commissioner of the Connecticut Department of Labor.
The Connecticut Department of Labor requested consideration of this bill to protect certain employees and independent contractors from onerous and unfair non-compete agreements imposed by an employer on an employee as a condition of employment. The Department greatly appreciates the Committee’s thoughtful consideration of this proposal. Generally, the bill bans all non-compete agreements for workers who earn less than three times the minimum wage, or five times the minimum wage if the worker is an independent contractor. For workers above those thresholds, it prohibits the use of a non-compete agreement if, among other things, the agreement imposes a restriction not to compete for more than one year following separation from employment when that interest could not reasonably be protected through less restrictive means, or it is more restrictive than necessary regarding period of time, geographic scope, type of work, and type of employer.
Concern about overuse of non-compete agreements has grown in recent years. As of today, nine states and the District of Columbia have restricted the use of non-compete agreements for certain lower-wage workers. In California, North Dakota, and Oklahoma, state law prohibits non-compete agreements entirely. Non-compete agreements restrict worker mobility, discourage entrepreneurship, and make it harder for new businesses to attract talent. There is also evidence that they contribute to depressed wage growth.
The proposed bill recognizes the necessity of protecting legitimate business interests, such as proprietary information. It also incentivizes the use of less restrictive means, including nondisclosure and non-solicitation agreements. These types of restrictions offer businesses protection, without the dampening effect on wage growth and economic activity. Setting limits on the use of noncompete agreements in Connecticut offers a middle ground that protects workers’ rights without sacrificing business interests. Any workers that are aggrieved by a violation of this proposed bill would be able to request that the Attorney General bring an action in Superior Court on their behalf.
Thank you for the opportunity to provide this testimony. I am available to answer any questions you may have.
Connecticut Department of Labor • www.ct.gov/dol
An Equal Opportunity/Affirmative Action Employer