Proposal would bar some workers’ noncompetes and limit customer restrictions

The proposal would bar employers from entering, enforcing, or threatening to enforce noncompete agreements with specified workers. Low-wage employees include workers below the state average weekly wage, workers entitled to overtime, certain interns and trainees, and some independent contractors. Employees whose earnings mainly come from commissions, incentives, or bonuses are excluded from that definition. The prohibition covers low-wage employees and employees who do not perform any of the listed sales, management, key employee, or professional duties. The proposal says it would apply to contracts entered into, amended, or renewed on or after July 1, 2026.

An employee who is not low-wage could agree in writing not to seek business from certain of the employer’s customers after leaving. This applies to a written agreement made for the employer’s benefit by an employee who is not low-wage. The agreement must state a time period. It may cover only customers the employee had material contact with, including prospective customers the employee actively sought, and products or services that are the same as or substantially similar to the employer’s. The restriction would apply for the stated period after the employee’s job ends.

An employee could sue a former employer or another person who tries to enforce a noncompete in violation of the section. The right applies when a former employer or another person attempts to enforce a noncompete against an employee in violation of the section. A court could void the agreement and order relief such as stopping enforcement, damages, lost pay, and legal fees. An employer could not retaliate against an employee for bringing the case. The employee would have two years from the latest of the signing date, learning of the agreement, the end of employment, or an enforcement step to bring a case.