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Non Compete Agreements Overhauled For Three New England States


Ah yes, non compete agreements...a favorite topic of mine.  While some cities and states generally allow non compete agreements to be freely used, other cities and states look less favorably upon these type of agreements.  Of note, three states in New England have each made waives in regard to how non competes will be allowed to be utilized going forward.  Even for those employers or employees that are not in Maine, New Hampshire, or Rhode Island, the developments out of these three states are noteworthy and worth a review.


Maine

Beginning September 18, 2019, employers in the state will be barred from entering into non compete agreements with employees that earn at or below 400% of the federal poverty line.  (For reference, in 2019, that would be $49,960.00 for an individual.)  Under the law in Maine, a non compete agreement is defined as "a contract or contract provision that prohibits an employee or prospective employee from working in the same or similar fashion or in a specified geographic area for a certain period of time following termination of employment."

For employees that will still be able to enter into non competes, Maine employers will now be required to 1) disclose the non compete prior to an offer of employment and 2) provide a copy of the non compete three business days before the employee is required to sign the non compete.  Once the non compete is signed, it will not take effect until after the employee has been employed for one year or a period of six months after the non compete was signed, whichever is later.

New Hampshire

Beginning September 8, 2019, employers in the state will be barred from entering into non compete agreements with low wage employees in the state.  Low wage employees are defined as those earning an hourly rate less than or equal to 200% of the federal minimum wage rate.  (For reference, that would be approximately $30,160.00 annually.)  Under the law in New Hampshire, a non compete agreement is defined as "an agreement between an employer and a low wage employee that restricts such low wage employee from performing:  1) work for another employer for a specified period of time; 2) work in a specified geographical area; or 3) work for another employer that is similar to such low wage employee's work for the employer who is a party to the agreement."

Republican Governor Chris Sununu signed this legislation into law back on July 11th.

Rhode Island

Last but certainly not least, Rhode Island has approved a proposed law that would prohibit employers from entering into non compete agreements with low wage employees.  Low wage employees are defined as employees with average annual earnings of not more than 250% of the federal poverty level.  (For reference, that would be approximately $31,225.00 for an individual.)  As well, the law would bar non compete agreements with undergraduate/graduate students and employees 18 years old or younger.

Under the proposed law in Rhode Island, a non compete agreement is defined as "an agreement between an employer and employee, or otherwise arising out of an existing or anticipated employment relationship, under which the employee or expected employee agrees that he or she will not engage in certain specified activities competitive with his or her employer, after the employment relationship has ended."

Currently, this proposed bill is before Rhode Island Governor Gina Raimondo for signature.



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