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Committee recommends passage of bill clarifying enforceability of certain restrictive covenants
Summary
Senate Bill 241, which adds specific provisions to the Restraint of Trade Act to find certain covenants in contracts are not restraints of trade and provides interpretive guidance, was recommended favorably by the committee.
Senate Bill 241, which would add enumerated circumstances under the Restraint of Trade Act finding that certain contractual covenants are not a restraint of trade and providing interpretive guidance for courts, was presented to the Senate Judiciary Committee and moved favorably.
The reviser explained the bill would add five provisions identifying covenants that presumptively are not restraints of trade and would provide guidance on how specific covenants should be interpreted. A committee member asked whether the legislation would apply retroactively; the reviser responded that retroactivity is ultimately a question for the courts unless the legislature includes explicit retroactive language, and the present draft contains no retroactive provision.
Senator Titus moved the committee to recommend SB 241 favorably and Senator Argebreit seconded; the committee voted by voice to advance the bill.
