Will a Connecticut court enforce this employee non-compete?
At common law, if the restraint is reasonable, judged on five factors: (1) the length of time the restriction operates; (2) the geographical area covered; (3) the fairness of the protection accorded to the employer; (4) the extent of the restraint on the employee's opportunity to pursue his occupation; and (5) the extent of interference with the public's interests; time and geographic restrictions are valid if reasonably limited and fairly protecting the interests of both parties (Robert S. Weiss & Associates v. Wiederlight, footnote 2, which states the five factors and cites Scott v. General Iron & Welding for them). Weiss found the trial court's conclusion that the covenant before it was reasonable consistent with its prior cases, citing Scott as 'upholding five year statewide covenant'. Statutes override that test for specific occupations: a physician covenant is valid only if necessary to protect a legitimate business interest, reasonably limited, and otherwise consistent with law and public policy, with the enforcing party bearing the burden, and one entered, amended, extended or renewed on or after July 1, 2016 may not restrict competition for more than one year or beyond fifteen miles from the primary practice site, and is unenforceable if the employment agreement was not made in anticipation of or as part of a partnership or ownership agreement and expires without a bona fide renewal offer, or if the employer terminates the relationship other than for cause (§ 20-14p(b)(2)); a physician covenant entered, amended, extended or renewed on or after October 1, 2023 is also unenforceable if the physician does not agree to a proposed material change to the compensation terms before or at extension or renewal and the contract then expires unrenewed or is terminated by the employer other than for cause, a rule that does not apply to a covenant with a group practice of not more than thirty-five physicians majority-owned by physicians (§ 20-14p(b)(3)); physician assistants and advanced practice registered nurses have the same validity test, one-year/fifteen-mile limit and expiry and termination rules for covenants entered, amended, extended or renewed on or after October 1, 2023, and the same October 1, 2023 material-compensation-change rule, which for physician assistants and advanced practice registered nurses carries no group-practice exception (§§ 20-12k, 20-101d); a broadcast industry employer's employment contract with a broadcast employee (an employee of a broadcast television or radio station owner or operator, other than one whose services primarily include sales or management functions; cable stations and cable networks are not covered employers) may not require the employee to refrain from obtaining employment in a specified geographical area for a specified period after termination, to disclose the terms or conditions of an offer of employment, or the existence of any such offer, from any other broadcast industry employer following the expiration of the term of the employment contract, or to agree to enter into a subsequent employment contract with that employer, or to extend or renew the existing contract, upon the same terms and conditions offered by a prospective employer (§ 31-50b); a security guard (a person employed in standard occupational classification 339032) may not be required to agree not to engage in the same or a similar job at the same location for another employer or as a self-employed person unless the employer proves the guard obtained trade secrets (§ 31-50a); and any covenant not to compete restricting an individual from providing companion, home health or homemaker services is void (§§ 20-670(4), 20-681).
The trap
The occupational statutes are date-gated in their own text: § 20-14p's one-year/fifteen-mile limit applies to physician covenants entered, amended, extended or renewed on or after July 1, 2016, and its separate-signature requirement to each covenant 'entered into, amended or renewed on and after' that date (§ 20-14p(b)(4) does not say 'extended'); the physician-assistant and APRN versions start October 1, 2023; § 31-50b applies to broadcast contracts entered, renewed or extended on or after July 1, 2007, and § 31-50a to security-guard agreements on or after October 1, 2007. Under §§ 20-14p, 20-12k and 20-101d an amendment, extension or renewal on or after the date brings an older covenant under the rule (§§ 31-50a and 31-50b say 'entered into, renewed or extended'). For a physician covenant entered, amended, extended or renewed on or after July 1, 2016, termination by the employer other than for cause makes it unenforceable regardless of how reasonable it is, as does expiry without a bona fide renewal offer where the agreement was not made in anticipation of or as part of a partnership or ownership agreement. The remainder of a contract survives a covenant voided under §§ 20-14p, 20-12k or 20-101d, including damages provisions.
22 authorities
- case208 Conn. 525Robert S. Weiss & Associates, Inc. v. WiederlightConn.decided 1988read it at the source ↗
The words that state the rule
The five factors to be considered in evaluating the reasonableness of a restrictive covenant ancillary to an employment agreement are: (1) the length of time the restriction operates; (2) the geographical area covered; (3) the fairness of the protection accorded to the employer; (4) the extent of the restraint on the employee’s opportunity to pursue his occupation; and (5) the extent of interference with the public’s interests. Scott v. General Iron & Welding Co., 171 Conn. 132, 137 , 368 A.2d 111 (1976); New Haven Tobacco Co. v. Perrelli, 11 Conn. App. 636, 638-39 , 528 A.2d 865 (1987).
- case208 Conn. 525Robert S. Weiss & Associates, Inc. v. WiederlightConn.decided 1988read it at the source ↗
The words that state the rule
The trial court’s conclusion that this restrictive covenant was reasonable is consistent with other cases where we have held that time and geographic restrictions in a covenant not to compete are valid if they are reasonably limited and fairly protect the interests of both parties. See Scott v. General Iron & Welding Co., supra, 138, 140 (upholding five year statewide covenant barring employee from working as manager in *531 competing business)
- statuteConn. Gen. Stat. § 20-14penactment date not established
The words that state the rule
A covenant not to compete is valid and enforceable only if it is: (A) Necessary to protect a legitimate business interest; (B) reasonably limited in time, geographic scope and practice restrictions as necessary to protect such business interest; and (C) otherwise consistent with the law and public policy. The party seeking to enforce a covenant not to compete shall have the burden of proof in any proceeding.
- statuteConn. Gen. Stat. § 20-14penactment date not established
The words that state the rule
A covenant not to compete that is entered into, amended, extended or renewed on or after July 1, 2016, shall not: (A) Restrict the physician's competitive activities (i) for a period of more than one year, and (ii) in a geographic region of more than fifteen miles from the primary site where such physician practices; or (B) be enforceable against a physician if (i) such employment contract or agreement was not made in anticipation of, or as part of, a partnership or ownership agreement and such contract or agreement expires and is not renewed, unless, prior to such expiration, the employer makes a bona fide offer to renew the contract on the same or similar terms and conditions, or (ii) the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.
- statuteConn. Gen. Stat. § 20-12kenactment date not established
The words that state the rule
A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall not: (A) Restrict the physician assistant's competitive activities (i) for a period of more than one year, and (ii) in a geographic region of more than fifteen miles from the primary site where such physician assistant practices; or (B) be enforceable against a physician assistant if (i) such employment contract or agreement was not made in anticipation of, or as part of, a partnership or ownership agreement and such contract or agreement expires and is not renewed, unless, prior to such expiration, the employer makes a bona fide offer to renew the contract on the same or similar terms and conditions, or (ii) the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.
- statuteConn. Gen. Stat. § 20-101denactment date not established
The words that state the rule
A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall not: (A) Restrict the advanced practice registered nurse's competitive activities (i) for a period of more than one year, and (ii) in a geographic region of more than fifteen miles from the primary site where such advanced practice registered nurse practices; or (B) be enforceable against an advanced practice registered nurse if (i) such employment contract or agreement was not made in anticipation of, or as part of, a partnership or ownership agreement and such contract or agreement expires and is not renewed, unless, prior to such expiration, the employer makes a bona fide offer to renew the contract on the same or similar terms and conditions, or (ii) the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.
- statuteConn. Gen. Stat. § 31-50benactment date not established
The words that state the rule
No broadcast industry employer employment contract for the services of a broadcast employee may contain a provision requiring that such broadcast employee: (1) Refrain from obtaining employment in a specified geographical area for a specified period of time after termination of employment with that broadcast industry employer; (2) Disclose the terms or conditions of an offer of employment, or the existence of any such offer, from any other broadcast industry employer following the expiration of the term of the employment contract; or (3) Agree to enter into a subsequent employment contract with the broadcast industry employer, or extend or renew the existing employment contract, upon the same terms and conditions offered by a prospective employer.
- statuteConn. Gen. Stat. § 31-50aenactment date not established
The words that state the rule
No employer may require any person employed in the classification 339032 of the standard occupational classification system of the Bureau of Labor Statistics of the United States Department of Labor to enter into an agreement prohibiting such person from engaging in the same or a similar job, at the same location at which the employer employs such person, for another employer or as a self-employed person, unless the employer proves that such person has obtained trade secrets, as defined in subsection (d) of section 35-51 , of the employer.
- statuteConn. Gen. Stat. § 20-670enactment date not established
The words that state the rule
As used in sections 20-670 to 20-682 , inclusive: (1) “Certificate” means a certificate of registration issued under section 20-672 . (2) “Commissioner” means the Commissioner of Consumer Protection or any person designated by the commissioner to administer and enforce the provisions of sections 20-670 to 20-682 , inclusive. (3) “Companion services” means nonmedical, basic supervision services to ensure the safety and well-being of a person in the person's home. (4) “Covenant not to compete” means any agreement or contract that restricts the right of an individual to provide companion services, home health services or homemaker services (A) in any geographic area of the state for any period of time, or (B) to a specific individual.
- statuteConn. Gen. Stat. § 20-681enactment date not established
The words that state the rule
Sec. 20-681. Covenants not to compete, homemaker, companion, home health services. Prohibition established. Any covenant not to compete is against public policy and shall be void and unenforceable.
- statuteConn. Gen. Stat. § 20-14penactment date not established
The words that state the rule
A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall not be enforceable if (A) the physician who is a party to the employment or other contract or agreement does not agree to a proposed material change to the compensation terms of such contract or agreement prior to or at the time of the extension or renewal of such contract or agreement, and (B) the contract or agreement expires and is not renewed by the employer or the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated by the employer for cause. The provisions of this subdivision shall not apply to a covenant not to compete that is entered into between a physician and a group practice, as defined in section 19a-486i , of not more than thirty-five physicians the majority ownership of which is comprised of physicians.
- statuteConn. Gen. Stat. § 20-14penactment date not established
The words that state the rule
Each covenant not to compete entered into, amended or renewed on and after July 1, 2016, shall be separately and individually signed by the physician.
- statuteConn. Gen. Stat. § 20-14penactment date not established
The words that state the rule
The remaining provisions of any contract or agreement that includes a covenant not to compete that is rendered void and unenforceable, in whole or in part, under the provisions of this section shall remain in full force and effect, including provisions that require the payment of damages resulting from any injury suffered by reason of termination of such contract or agreement.
- statuteConn. Gen. Stat. § 31-50benactment date not established
The words that state the rule
(a) As used in this section: (1) “Associated broadcast entities” means entities that provide reporting services to broadcast television or radio stations, including without limitation, subcontractors that provide weather, sports, traffic and other reports for broadcast or cablecast; (2) “Broadcast employee” means any employee of a broadcast industry employer, except those employees whose services primarily include sales or management functions; (3) “Broadcast industry employer” means the owner or operator of one or more broadcast television or radio stations, including any associated broadcast entity, but excluding cable stations or cable networks;
- statuteConn. Gen. Stat. § 31-50benactment date not established
The words that state the rule
The provisions of this section shall apply to employment contracts entered into, renewed or extended on or after July 1, 2007.
- statuteConn. Gen. Stat. § 31-50aenactment date not established
The words that state the rule
The provisions of this section shall apply to agreements entered into, renewed or extended on or after October 1, 2007.
- statuteConn. Gen. Stat. § 20-12kenactment date not established
The words that state the rule
A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall be valid and enforceable only if it is: (A) Necessary to protect a legitimate business interest; (B) reasonably limited in time, geographic scope and practice restrictions as necessary to protect such business interest; and (C) otherwise consistent with the law and public policy. The party seeking to enforce a covenant not to compete shall have the burden of proof in any proceeding.
- statuteConn. Gen. Stat. § 20-12kenactment date not established
The words that state the rule
(3) A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall not be enforceable if (A) the physician assistant who is a party to the employment or other contract or agreement does not agree to a proposed material change to the compensation terms of such contract or agreement prior to or at the time of the extension or renewal of such contract or agreement; and (B) the contract or agreement expires and is not renewed by the employer or the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.
- statuteConn. Gen. Stat. § 20-12kenactment date not established
The words that state the rule
(c) The remaining provisions of any contract or agreement that includes a covenant not to compete that is rendered void and unenforceable, in whole or in part, under the provisions of this section shall remain in full force and effect, including provisions that require the payment of damages resulting from any injury suffered by reason of termination of such contract or agreement.
- statuteConn. Gen. Stat. § 20-101denactment date not established
The words that state the rule
A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall be valid and enforceable only if it is: (A) Necessary to protect a legitimate business interest; (B) reasonably limited in time, geographic scope and practice restrictions as necessary to protect such business interest; and (C) otherwise consistent with the law and public policy. The party seeking to enforce a covenant not to compete shall have the burden of proof in any proceeding.
- statuteConn. Gen. Stat. § 20-101denactment date not established
The words that state the rule
(3) A covenant not to compete that is entered into, amended, extended or renewed on or after October 1, 2023, shall not be enforceable if (A) the advanced practice registered nurse who is a party to the employment or other contract or agreement does not agree to a proposed material change to the compensation terms of such contract or agreement prior to or at the time of the extension or renewal of such contract or agreement; and (B) the contract or agreement expires and is not renewed by the employer or the employment or contractual relationship is terminated by the employer, unless such employment or contractual relationship is terminated for cause.
- statuteConn. Gen. Stat. § 20-101denactment date not established
The words that state the rule
(c) The remaining provisions of any contract or agreement that includes a covenant not to compete that is rendered void and unenforceable, in whole or in part, under the provisions of this section shall remain in full force and effect, including provisions that require the payment of damages resulting from any injury suffered by reason of termination of such contract or agreement.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.