Bill > HB05492

This bill, effective October 1, 2026, significantly limits the use of noncompete agreements, which are contracts that prevent workers from working for competitors or starting similar businesses after leaving a job, and exclusivity agreements, which prevent workers from holding other jobs or working for themselves while employed. Generally, noncompete agreements will be void and unenforceable if the worker's hourly wage is below certain thresholds (less than twice the minimum fair wage for employees, or less than five times the minimum fair wage for independent contractors) or if they restrict activities in areas or types of work the worker didn't perform. For higher-paid workers, noncompetes are only enforceable if they are limited to one year (or two years if the worker is compensated for that entire period), are necessary to protect legitimate business interests (like trade secrets or customer goodwill) and cannot be achieved through less restrictive means, are signed separately from other employment documents, and are provided to the worker at least five business days before they accept a job or sign the agreement, along with a notice of their rights. Exclusivity agreements are similarly restricted and can only be imposed if the worker is an exempt employee earning more than twice the minimum fair wage, or an independent contractor earning more than five times the minimum fair wage, or if the additional work would endanger the worker or the public, or substantially interfere with their primary job's scheduling. The bill also prohibits courts from modifying noncompete or exclusivity agreements that violate these provisions, places the burden of proof on the party seeking to enforce these agreements, and allows workers to sue for violations, potentially recovering damages, civil penalties up to $5,000, and attorney fees, with the Attorney General also empowered to investigate and bring legal action on behalf of the state.