Working Together

At its March 7, 2024 meeting, the Connecticut General Assembly’s Labor and Public Employees Committee began the process of approving bills.  The following is a brief summary of the bills that the Committee has voted favorably on and advanced out of committee for further consideration.  (Please note: These bills have not been passed by the full General Assembly or signed by the Governor; they have only been approved by the Committee.) 

HERE WE GO AGAIN: NON-COMPETES

H.B. No. 5269 (“An Act Concerning Noncompete Agreements”) is similar in many ways to prior bills that did not pass, although this year’s bill would protect both employees and independent contractors (i.e., “workers”).  This bill would mandate that a covenant not to compete entered into, renewed, or extended is permissible only if: 1) it is not restrictive of the worker's competitive activities for a period of more than one year following termination; 2) it is necessary to protect a legitimate business interest of the employer that could not be protected through less restrictive means (e.g., non-disclosure or non-solicitation agreements, the Uniform Trade Secrets’ Act protections); 3) it is no more restrictive than necessary to protect such business interests in terms of duration, geographic scope, type of work and type of employer; 4) the worker is an exempt employee (i.e., a salaried employee not entitled to overtime pay); 5) the employment or contractual relationship was not terminated by the worker for good cause solely attributable to the employer or contractor;  6) the worker is not required to submit to an  adjudication outside of the state; and 7) the covenant is otherwise consistent with the public interest, the law of this state “and public policy.”  In addition to the limitation to exempt employees, covenants not to compete shall NOT be enforceable against: 1) employees who receive compensation at less than three times the minimum wage; or 2) independent contractors whose monetary compensation is less than five times the minimum wage.

The bill provides that each covenant not to compete shall: 1) be provided to the employee not less than ten business days prior to the date of signing or the deadline for signing, whichever is earlier; 2) contain a statement of the employee’s rights (including the right to consult with counsel prior to signing); 3) be supported by sufficient consideration independent from continuation of the employment or contractor relationship, if the agreement is added to an existing employment or independent contractor relationship; and 4) be signed by both the employee and the employer.

Even if all the above conditions are met, a noncompete agreement is presumed unenforceable if it applies to: 1) geographic areas in which the employee neither provided services nor had a material presence or influence within the last two years of employment; or 2) types of work that the employee did not perform during the last two years of employment. The bill provides that a covenant not to compete that otherwise conforms in all respects to these new requirements shall not be invalid based upon its duration of more than one year (but not longer than two years) following the termination if it is a part of an employment agreement or a separation agreement under which the employer agrees to continue to compensate the employee with the employee's base salary and benefits for at least one year following the termination. 

The bill excludes from the definition of covered non-compete agreements: non-solicitation agreements (provided that such agreements are not longer than one year’s duration and are no more restrictive that necessary to protect business interests in terms of duration, geographic scope, type of work and type of employer), non-disclosure/confidentiality agreements, agreements not to reapply to the same employer, and any agreement made in anticipation of a sale of the goodwill of a business or all of the seller’s ownership interest in a business or as part of a partnership or ownership agreement.

This bill has a separate provision with respect to “exclusivity agreements,” which are defined as contracts, provisions, or agreements that restrain a worker from (or impose a penalty on a worker for) being simultaneously employed by another employer, working as an independent contractor, or being self-employed. Specifically, no employer or contractor may request or require that a worker sign such an exclusivity agreement unless the worker is: 1) an exempt employee who receives compensation more than three times the minimum wage; or 2) an independent contractor whose monetary compensation is more than five times the minimum wage. However, an employer or contractor may request or require a worker to sign an exclusivity agreement if the worker's additional employment, work  as an independent contractor, or being self-employed would: 1) imperil the safety of the worker, the worker's coworkers, or the public; or 2) substantially interfere with the reasonable and normal scheduling expectations for the worker, provided that on-call shift scheduling shall not be considered a reasonable scheduling expectation for the purposes of this bill.

The bill would permit a worker (and would authorize the Attorney General on a worker’s behalf) to bring a civil action in Superior Court for any violation of its provisions.  The bill provides that the party seeking to enforce a covenant not to compete or exclusivity agreement would have the burden of proof in any proceeding. The remaining provisions of any contract or agreement that includes a covenant not to compete or exclusivity agreement that is rendered void and unenforceable would remain in full force and effect, including provisions requiring the payment of damages resulting from any injury suffered by reason of termination of such contract or agreement. 

FAMILY AND MEDICAL LEAVE

H.B. No. 5165 (“An Act Expanding Connecticut Family and Medical Leave Benefits To Noncertified School Employees”) would extend coverage under Connecticut’s Family and Medical Leave Act to all non-certified employees of a local or regional board of education who have been employed for at least 12 months by such employer, and for at least 950 hours of service with such employer during the 12 months before benefits are sought.  Such rights would be the same as those provided under the federal FMLA (even if they work less than the typical federal 1250-hour threshold).  Currently, only school paraprofessionals receive this extended FMLA protection.      

S.B. No. 222 (“An Act Concerning Changes to the Paid Family and Medical Leave Statutes”) would extend coverage for the Connecticut Paid Family and Medical Leave program to federally recognized tribes that enter into a memorandum of understanding with the Governor.  Among  other things, the bill would also 1) explicitly require an employer making payments to an employee under the PFML statutes to register with the Paid Leave Authority and file any reports required by the Authority, 2)  allow for employees to receive benefits under this program concurrently with the victim compensation program administered by the Office of Victim Services, as long as the total compensation does not exceed the employee’s regular rate of pay, and 3) address overpayment issues.

THE CONNECTICUT RETIREMENT SECURITY PROGRAM 

S.B. No. 136 (“An Act Making Changes To The Connecticut Retirement Security Program Statutes”) would implement various recommendations of the Comptroller concerning the administration of the Connecticut Retirement Security Program, including but not limited to raising a participating employee’s contribution level from 3% to 5% of taxable income, and addressing various governance issues with respect to the powers of the Comptroller and the Program’s Advisory Board. This bill would provide that no Board member shall be subject to civil liabilities for the debts, obligations or liabilities of the Program, and that the Comptroller shall indemnify and hold harmless individuals who act as Board members. The bill would also expressly provide that employers shall not be held liable for an employee's decision whether or not to participate in the program or for the investment decisions of the Board or of any enrollee. The bill would permit the Comptroller to enter into intergovernmental agreements, memoranda of cooperation, or memoranda of agreement with other states or territories of the United States relating to areas of collaboration. 

UNEMPLOYMENT COMPENSATION 

H.B. No. 5164 (“An Act Concerning Unemployment Compensations Benefits”) would allow individuals to be eligible for unemployment compensation benefits after 14 days of a continuous “labor dispute” (i.e., a strike).

H.B. No. 5266 (“An Act Amending The Time To Protest Benefit Charges On An Employer's Unemployment Insurance Quarterly Statement”). As the title suggests, this bill would shorten the time in which an employer can protest any unemployment benefits it contends have been improperly charged to its employer unemployment insurance quarterly statements due to fraud or error from 60 days to 40 days. 

H.B. No. 5270 (“An Act Increasing The Threshold Amount For Felony Unemployment Compensation Fraud”) would increase the threshold amount for felony unemployment compensation fraud to fraud that is more than $2,000.  Currently, the threshold amount is $500. 

OSHA 

H.B. No. 5265 (“An Act Concerning Volunteer Fire Departments And Ambulance Companies And The Definition Of Employer Under The State Occupational Safety And Health Act”) would provide that volunteer fire departments and ambulance companies are to be considered employers under Connecticut’s OSHA laws, except that those departments and companies governed by the federal OSHA law would continue to be regulated by the federal law.  

MISCELLANEOUS 

H.B. No. 5267 (“An Act Making Changes to and Repealing Obsolete Provisions of Statutes Relevant to the Labor Department”) would, as the title suggests, repeal obsolete provisions and statutes relevant to the Labor Department. 

FINALLY, MORE “STUDIES” 

H.B. No. 5385 (“An Act Studying The Establishment Of A Full Employment Trust Fund”) would require Connecticut’s Commissioner of Labor to conduct a study regarding the establishment of a full employment trust fund, to be administered by the Department of Labor, that awards employment opportunity grants to public and nonprofit entities for the  purpose of creating employment opportunities and job-training  programs, and to report by January 1, 2025 the results of this study (with recommendations) to the General Assembly’s Labor and Public Employees Committee. H.B. No. 5268 (“An Act Concerning the Labor Department”) would require Connecticut’s Commissioner of Labor to conduct a study of the Connecticut Department of Labor, and report by January 1, 2025 the results of this study (with recommendations) to the General Assembly’s Labor and Public Employees Committee.  S.B. No. 219 (“An Act Concerning Working Conditions”) would require Connecticut’s Commissioner of Labor to conduct a study on working conditions in our state, and report by January 1, 2025 the results of this study (with recommendations) to the General Assembly’s Labor and Public Employees Committee.  H.B. No. 5265 (“An Act Concerning Workers’ Rights”) would require Connecticut’s Commissioner of Labor to conduct a study on the rights of employees in our state, and report by January 1, 2025 the results of this study (with recommendations) to the General Assembly’s Labor and Public Employees Committee.  S.B. No. 223 (“An Act Concerning Workers’ Compensation”) would require the Workers’ Compensation Commission to conduct a study of the workers’ compensation system in our state, and report by January 1, 2025 the results of this study (with recommendations) to the General Assembly’s Labor and Public Employees Committee. 

The deadline for the Labor and Public Employees Committee to approve bills and advance them out of committee is March 26, 2024.  Bills affecting labor and employment issues may also emerge from other committees (such as the Judiciary Committee and the Planning and Development Committee).  The 2024 regular session of the General Assembly is scheduled to adjourn on May 8, 2024, so stay tuned to see if any of these bills are eventually enacted.

Please contact any of Pullman & Comley's Labor and Employment Law attorneys if you have any questions.