Connecticut Governor Vetoes Bill Regulating Non-Compete Agreements

On July 12, 2013, Governor Dannel Malloy vetoed legislation that would have limited the use of non-compete agreements in Connecticut (which we covered in a recent issue of the Connecticut eAuthority). The bill would have imposed certain requirements on the use of non-compete agreements in the context of mergers and acquisitions. Using his veto authority, Governor Malloy sent the law back to the state’s General Assembly, citing its potential to produce legal uncertainty and ambiguity due to undefined and unclear terms. While the governor did not accept the wording of this particular legislation, he noted that despite the extensive common law in Connecticut regarding the appropriate use and scope of non-compete agreements, “additional protections for employees may be warranted to guarantee a reasonable period of time to review” non-compete agreements. The bill will now have to await further review by lawmakers during the 2013-14 Connecticut legislative session. However, for now Connecticut employers do not need to comply with any new requirements when using non-compete agreements.

Note: This article was published in the July 15, 2013 issue of the Connecticut eAuthority.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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