We reported in an earlier blog on May 28, 2013, that the Connecticut House of Representatives proposed to regulate non-compete agreements and codify the common law. The prior proposed bill has been modified to be applied only under circumstances of companies involved in mergers and acquisitions.

The bill that has been passed is entitled, “Employer Use of Non-Compete Agreements,” and it voids certain Connecticut non-compete agreements entered into, renewed or extended on or after October 1, 2013, subject to the following requirements.

These rules apply, only under two specific circumstances concerning mergers and acquisitions: “(1) an employer is acquired by or merges with another employer; and (2) as a result of the acquisition or merger, an employee’s continued employment is conditioned on the employee entering into a non-compete agreement.” The non-compete agreements will be void, “unless the employer provides the employee with: (1) a written copy of the agreement; and (2) at least seven days, and more if reasonable, to consider the merits of entering into the agreement.”

An employee may waive his or her right to have a non-compete agreement voided by signing a separate waiver agreement before entering into the non-compete agreement.

The bill will become law on October 1, 2013, if it is signed by the governor.

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