Bill Text: HI SB2488 | 2016 | Regular Session | Introduced
Bill Title: Employment Agreements; Physicians; Noncompete Clause; Nonsolicit Clause
Spectrum: Moderate Partisan Bill (Democrat 6-1)
Status: (Introduced - Dead) 2016-01-27 - Referred to CPH, JDL. [SB2488 Detail]
Download: Hawaii-2016-SB2488-Introduced.html
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THE SENATE |
S.B. NO. |
2488 |
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TWENTY-EIGHTH LEGISLATURE, 2016 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to employment agreements.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that a restrictive covenant not to compete with a former employer imposes a special hardship on licensed physicians, as these highly specialized professionals are trained to perform specific jobs. Due to the geographic area of Hawaii being unique and limited, noncompete agreements unduly restrict future employment opportunities for physicians and have a chilling effect on the stability and progress of medical care offered within the State. Eliminating restrictive covenants for licensed physicians will stimulate Hawaii's economy by preserving jobs for licensed physicians and by providing opportunities for those physicians to establish new job opportunities in the State.
The purpose of this Act is to prohibit noncompete and nonsolicit clauses in employment contracts relating to licensed physicians.
SECTION 2. Section 480-4, Hawaii Revised Statutes, is amended to read as follows:
"§480-4 Combinations in restraint of trade, price-fixing and limitation of production prohibited. (a) Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce in the State, or in any section of this State is illegal.
(b) Without limiting the generality of subsection (a), no person, exclusive of members of a single business entity consisting of a sole proprietorship, partnership, trust, or corporation, shall agree, combine, or conspire with any other person or persons, or enter into, become a member of, or participate in, any understanding, arrangement, pool, or trust, to do, directly or indirectly, any of the following acts, in the State or any section of the State:
(1) Fix, control, or maintain the price of any commodity;
(2) Limit, control, or discontinue[,] the
production, manufacture, or sale of any commodity for the purpose or with the result
of fixing, controlling, or maintaining its price;
(3) Fix, control, or maintain[,] any standard
of quality of any commodity for the purpose or with the result of fixing,
controlling, or maintaining its price;
(4) Refuse to deal with any other person or persons for the purpose of effecting any of the acts described in paragraphs (1) to (3).
(c) Notwithstanding subsection (b) and without limiting the application of subsection (a), it shall be lawful for a person to enter into any of the following restrictive covenants or agreements ancillary to a legitimate purpose not violative of this chapter, unless the effect thereof may be substantially to lessen competition or to tend to create a monopoly in any line of commerce in any section of the State:
(1) A covenant or agreement by the transferor of a business not to compete within a reasonable area and within a reasonable period of time in connection with the sale of the business;
(2) A covenant or agreement between partners not to compete with the partnership within a reasonable area and for a reasonable period of time upon the withdrawal of a partner from the partnership;
(3) A covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business or agricultural uses, or covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business uses and of the lessor to be restricted in the use of premises reasonably proximate to any such leased premises to certain business uses;
(4) A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competition with the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the termination of employment, within such time as may be reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.
(d) Except as provided in subsection (c)(4), it shall be prohibited to include a noncompete clause or a nonsolicit clause in any employment contract relating to an employee of a technology business. The clause shall be void and of no force and effect.
[As used in this subsection:
"Information technology
development" means the design, integration, deployment, or support
services for software.
"Noncompete clause" means a
clause in an employment contract that prohibits an employee from working in a
specific geographic area for a specific period of time after leaving employment
with the employer.
"Nonsolicit clause" means a
clause in an employment contract that prohibits an employee from soliciting
employees of the employer after leaving employment with the employer.
"Software development" means the
creation of coded computer instructions.
"Technology business" means a
trade or business that derives the majority of its gross income from the sale
or license of products or services resulting from its software development or
information technology development, or both. A "technology business"
excludes any trade or business that is considered by standard practice as part
of the broadcast industry or any telecommunications carrier, as defined in
section 269-1, that holds a franchise or charter enacted or granted by the
legislative or executive authority of the State or its predecessor governments.]
(e) Except as provided in subsection (c)(4), it shall be prohibited to include a noncompete or nonsolicit clause in any employment contract relating to a licensed physician. The clause shall be void and of no force and effect.
(f) As used in this section:
"Information technology development" means the design, integration, deployment, or support services for software.
"Licensed physician" means a physician or osteopathic physician licensed by the Hawaii medical board pursuant to chapter 453.
"Noncompete clause" means a clause in an employment contract that prohibits an employee from working in a specific geographic area for a specific period of time after leaving employment with the employer.
"Nonsolicit clause" means a clause in an employment contract that prohibits an employee from soliciting employees of the employer after leaving employment with the employer.
"Software development" means the creation of coded computer instructions.
"Technology business" means a trade or business that derives the majority of its gross income from the sale or license of products or services resulting from its software development or information technology development, or both. A "technology business" excludes any trade or business that is considered by standard practice as part of the broadcast industry or any telecommunications carrier, as defined in section 269-1, that holds a franchise or charter enacted or granted by the legislative or executive authority of the State or its predecessor governments."
SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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Report Title:
Employment Agreements; Physicians; Noncompete Clause; Nonsolicit Clause
Description:
Prohibits noncompete and nonsolicit clauses in employment contracts relating to licensed physicians.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
