Bill > H0334

This bill proposes significant restrictions on two types of employment agreements in Vermont: noncompete agreements and stay-or-pay provisions. Specifically, the bill renders most noncompete agreements void, defining them as contractual provisions that restrict an employee from working for another employer in terms of time, geography, or job capacity after leaving their current job. The bill allows exceptions for noncompete agreements only in cases involving the sale of a business, partnership dissolution, or limited liability company termination. For stay-or-pay provisions, which require employees to repay certain costs if they leave their job, the bill establishes that such agreements are generally unlawful, but permits them under specific conditions: the employee must voluntarily agree, the repayment amount must be reasonable and tied to a specific benefit, the stay period must be reasonable, and the provision cannot require repayment if the employee is terminated without cause. The bill mandates that employers notify employees about the unenforceability of existing noncompete and stay-or-pay agreements that do not meet these new standards, and it protects employees from retaliation if they challenge such agreements. The legislation aims to provide more employment mobility and prevent employers from unfairly restricting employees' ability to change jobs or seek new opportunities.

Housing and Urban Affairs

https://legislature.vermont.gov/bill/status/2026/H.334