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Senate trims non‑compete restrictions, sets one‑year limit and employer liability
Summary
After substituting language, the Senate adopted an eighth substitute for post‑employment restriction amendments (House Bill 251) that limits enforceable non‑compete covenants to one year and allows employers to be liable for certain enforcement costs; senators debated exemptions and process before moving the substitute to third reading.
Senators debated a revised set of post‑employment restriction amendments that replaced earlier substitutes and narrowed the bill to two central provisions: a one‑year maximum enforceable duration for post‑employment non‑compete agreements and employer liability for costs if an enforcement action is held improper.
Senator Adams, who led the floor discussion, said the eighth substitute removed broad bans and the complex exemption structure in prior drafts, leaving a narrower framework focused on reasonableness of geographic scope and a one‑year cap. The sponsor told the Senate employers could still use non‑compete agreements but that longer restrictions would be limited, and that employers who sought to enforce overly broad covenants could face liability for arbitration, attorney fees and court costs.
Floor discussion covered severance agreements, whether the substitute would apply to negotiated severance arrangements, and which party (usually the former employer) brings enforcement actions. Senators asked detailed questions about who would be liable and how the liability would be triggered; the sponsor clarified the intent was to allow employees a path forward while preserving employer remedies for legitimate protections.
After adoption of the eighth substitute on the floor, the Senate read the eighth substitute for a third time and recorded a roll call indicating the substitute had received 22 yea votes and 6 nay votes with 1 absent for the third‑reading action; the sponsor indicated intention to move final action the following day to allow time for review.
Next steps: the bill was placed for third reading and discussion and sponsors said they would continue work on final language and notify stakeholders; additional amendments or final passage may follow in a subsequent floor session.
