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New Laws for 2015: No More Non-Compete and Non-Solicit Clauses in High Tech Field (Hawaii)


On July 1, 2015, a new law went into effect in Hawaii which will have a big impact on employees in the high tech industry in the state.  Under the new law, Act 158, high tech companies are now prohibited from requiring their employees to enter into non-compete and non-solicit agreements as a condition of employment.  For a state like Hawaii which has traditionally been a strong proponent and enforcer of non-competes, this is a somewhat stunning change in direction. 

Employers can take some comfort in the fact that under this new law, there is a "grandfather"/"sunset" provision which provides that existing employment agreements of high tech companies that include non-compete and non-solicit clauses are not impacted.  It is important to note though, that if these agreements are amended, revised, or extended, these clauses could become void. 

Note, the new law still prohibits workers from leaving their jobs with trade secrets that can then be used against their former employers.  For the time being, employers can still rely upon Hawaii remaining a proponent of non-competes.  However, this new law might be signs of a changing view towards these provisions.  Time will tell...

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