Debate divides House over narrow ban on enforcing last-minute noncompetes; substitute fails

Lawmakers extensively debated first substitute HB81 on Feb. 17, 2017. Representative Green sponsored a measure aimed at addressing a specific alleged abuse: employers asking existing employees to sign non‑compete agreements and then terminating them shortly thereafter to restrict future employment. Green’s bill would create a statutory presumption that a non‑compete imposed in that way and followed by termination within six months without additional consideration is unenforceable.

Sponsor rationale and bill mechanics: Representative Green said the bill targets cases in which an employee is asked to sign a restrictive covenant while already employed, is not given new consideration (bonus, raise or promotion), and then is terminated within six months without cause. "An employer may not enforce a post employment restrictive covenant" in that scenario, Green said; the provision would not affect non‑disclosure or non‑solicit agreements.

Floor debate and objections: Opponents, including Representative Hawkes and others, urged deference to an ongoing stakeholder process and warned the bill could undermine a broader negotiated approach. Hawkes said the bill’s substance is worthy but that the measure cannot be divorced from broader policy discussions underway and that stakeholders had committed resources to a negotiated solution; he urged voting no to honor those negotiations. Representative Schultz and others described prior bipartisan efforts and a working group; some members expressed sympathy for the sponsor but argued the ongoing process should run its course.

Outcome: After floor debate and summations, the House recorded that the first substitute HB81 failed to pass and was returned to the clerk for filing.