SB 453 — Establishing uniform requirements for restrictive employment agreements

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Red = new code to be enacted WEST virginia legislature regular session IntroducedCommittee Substitute for Senate Bill 453 By Senators Woodrum and Trump [Introduced[Originating Januaryin 20,the 2022;Committee on the Judiciary;

referredreported toon theJanuary Committee27, on2022] the  Judiciary]  A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §47-29-1, §47-29-2, §47-29-3, §47-29-4, §47-29-5, §47-29-6, §47-29-7, §47-29-8, §47-29-9, §47-29-10, §47-29-11, §47-29-12, §47-29-13, §47-29-14, §47-29-15, §47-29-16, §47-29-17, §47-29-18, §47-29-19, §47-29-20, and §47-29-21,§47-29-20, all relating to establishing uniform requirements for restrictive employment agreementsagreements; and providing for civil penalties for violation of the article;

providing for civil penalties for violation of the article;

providingdefining forterms; definitions;

defining lowlow-wage wage workers;

and providing a transitional provision;provision.

and creating an effective date.

(1) “Confidentiality agreement” means a restrictive employment agreement that:

and (B) isIs not a condition of settlement or other resolution of a dispute.

(2) “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(3) “Employer” means a person that hires or contracts with a worker to work for the person.

(4) “No-business agreement” means a restrictive employment agreement that prohibits a worker from working for a client or customer of the employer.

(5) “Noncompete agreement” means a restrictive employment agreement that prohibits a worker from working other than for the employer.

(6) “Nonsolicitation agreement” means a restrictive employment agreement that prohibits a worker from soliciting a client or customer of the employer.

(7) “No-recruit agreement” means a restrictive employment agreement that prohibits a worker from hiring or recruiting another worker of the employer.employer.  (8) “Payment-for-competition agreement” means a restrictive employment agreement that imposes an adverse financial consequence on a worker for working other than for the employer but does not expressly prohibit the work.

 (9) “Payment-for-competition“Person” agreement” means a restrictive employment agreement that imposes an adverseindividual, financialestate, consequencebusiness, onnonprofit aentity, workeror for working other thanlegal forentity. the employer but does not expressly prohibit the work.

“Person” means an individual, estate, business or nonprofit entity, or other legal entity.

(10) “Record” means information:

(11) “Restrictive employment agreement” means an agreement or part of another agreement between an employer and worker that prohibits, limits, or sets a condition on working other than for the employer after the work relationship ends or a sale of a business is consummated.

(12) “Sale of a business” means sale, merger, consolidation, amalgamation, reorganization;reorganization, or other transaction, however denominated, of:

(A) All or otherpart transaction,of howevera denominated,business of:or nonprofit entity or association, or all or part of its assets;

(A) All or part of a business or nonprofit entity or association, or all or part of its assets, or (B) A substantial ownership interest in the entity or association.

(13) “Sign” means, with present intent to authenticate or adopt a record:

(14) “Signed agreement” means a restrictive employment agreement signed by the worker and the employer.

(15) “Special training” means instruction or other education a worker receives from a source other than the employer that:

(16) “Stated rate of pay” means the compensation, calculated on an annualized basis, an employer agrees to pay a worker.

(i) A healthcarehealth care benefit, severance pay, retirement benefit, or expense reimbursement;

(17) “Trade secret” has the same meaning as defined in §47-22-1 et seq.

of this code.  (18) “Training-repayment agreement” means a restrictive employment agreement that requires a worker to repay the employer for training costs incurred by the employer.

(19) “Work” means providing service.

(20) “Worker” means an individual workwho works for an employer.

(A) Includes an employee, independent contractor, extern, intern, volunteer, apprentice, or sole proprietor who provides service to a client or customer, and an individual who provides service through a business or nonprofit entity or association;

(e) This article does not affect a noncompetionnoncompetition obligation arising solely as a result of an existing ownership interest in a business entity.

Notice Requirements.requirements.

(a) Except as provided in subsection§47-29-4(e) (e),of this code, a restrictive employment agreement is prohibited and unenforceable unless:

(A) Subject to subsection§47-29-4(b) (b),of this code, a prospective worker,worker at least 14 days before the prospective worker accepts work or commences work, whichever is earlier;

(B) A current worker who receives a material increase in compensation,compensation at least 14 days before the increase or the worker accepts a change in job status or responsibilities, whichever is earlier;

or (C) A departing worker who is given consideration in addition to anything of value to which the worker is already entitled,entitled at least 14 days before the agreement is required to be signed;

(3) The proposed agreement and the signed agreement clearly specify the information, type of work activity, or extent of competition that the agreement prohibits, limits, or sets conditions on the worker after the work relationship ends;