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Lawmakers Seeking to Limit Non-Compete Clauses

Friday, January 10, 2020   (0 Comments)

Lawmakers are taking another run this year at a bill that would limit how much employers can control what their workers do when they leave for another job.

The House Commerce Committee took testimony on H.1 last year, seeking to balance the needs of workers who didn’t want to be unfairly restricted with those of business owners who didn’t want their trade secrets, customer lists or other property to be used by a competitor.

The House Commerce Committee, of which Kimball is ranking member, will take up the matter again Jan. 17.

Several states are examining legislation to limit non-compete agreements. Workers have complained that the agreements effectively block them from seeking a new job in their area.

“Non-compete agreements can be reasonably and fairly used, especially in business sales and can be critical protection for a company when dealing with a high-level employee or those who have access to sensitive or secret information which could unfairly damage the company if the employee were to go to a competitor,” said William Towle, a South Burlington employment lawyer who has represented workers and employers on the issue of non-competes.

“But non-compete agreements can be unfairly used on rank-and-file employees who the company does not reasonably or fairly need to restrict from future employment,” said Towle.

Lawmakers considering the measure last year heard from groups like the Vermont Bankers Association and from individuals who said their careers had been damaged by non-compete agreements.

The Vermont Technology Alliance supports their use, said Jeff Couture, the group’s executive director. He said they’re not common among his group’s members.

“However, there are some instances where these agreements are used and make sense, especially during start-up and early growth stages where there are unique skills involved,” Couture said. “While we support an effort to prevent the abuse of non-competition agreements, an outright ban could present problems for companies that use them appropriately.”

Read the VTDigger article by Anne Wallace Allen