2020 -- S 2087

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LC003485

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2020

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A N   A C T

RELATING TO LABOR AND LABOR RELATIONS - NONCOMPETITION AGREEMENTS

- BROADCAST EMPLOYEES

     

     Introduced By: Senators Lombardi, Nesselbush, Ciccone, Conley, and McCaffrey

     Date Introduced: January 21, 2020

     Referred To: Senate Judiciary

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 28-59-2 and 28-59-3 of the General Laws in Chapter 28-59

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entitled "Rhode Island Noncompetition Agreement Act [Effective January 15, 2020]" are hereby

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amended to read as follows:

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     28-59-2. Definitions. [Effective January 15, 2020.]

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     As used in this chapter:

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     (1) "Associated broadcast entities" means entities that provide reporting services to

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broadcast television or radio stations, including, without limitation, subcontractors that provide

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weather, sports, traffic, and other reports for broadcast or cablecast;

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     (2) "Broadcast employee" means any employee of a broadcast industry employer, except

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those employees whose services primarily include sales or management functions;

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      (1)(3) "Business entity" means any person as defined in § 43-3-6 and includes a

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corporation, business trust, estate trust, partnership, association, joint venture, government,

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governmental subdivision or agency, or any other legal or commercial entity.

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     (4) "Broadcast industry employer" means the owner or operator of one or more broadcast

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television or radio stations, including any associated broadcast entity, but excluding cable stations

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or cable networks;

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     (5) "Broadcast television or radio station" means an entity that is owned or operated

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either by holding a Federal Communications Commission television or radio license for the

 

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station, or by operating a station through a local service, sales, marketing, or outsourcing

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agreement;

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     (6) "Cable network" means an entity that distributes programming to two (2) or more

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local cable systems;

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     (7) "Cable station" means an entity that produces or transmits programming to one or

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more local cable systems; and

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     (2)(8) "Earnings" means wages or compensation paid to an employee in the first forty

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(40) hours of work in a given week, not inclusive of hours paid at an overtime, Sunday, or

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holiday rate.

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     (3)(9) "Employee" means an individual who works for hire, including an individual

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employed in a supervisory, managerial, or confidential position, but shall not include an

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independent contractor.

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     (4)(10) "Employer" means any person, business entity, partnership, individual

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proprietorship, joint venture, firm, company, or other similar legal entity that employs one or

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more employees, and shall include the state and its instrumentalities and political subdivisions,

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public corporations, and charitable organizations.

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     (5)(11) "Forfeiture agreement" means an agreement that imposes adverse financial

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consequences on a former employee as a result of the termination of an employment relationship,

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regardless of whether the employee engaged in competitive activities, following cessation of the

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employment relationship. Forfeiture agreements do not include forfeiture for competition

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agreements.

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     (6)(12) "Forfeiture for competition agreement" means an agreement that by its terms or

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through the manner in which it is enforced, imposes adverse financial consequences on a former

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employee as a result of the termination of an employment relationship if the employee engages in

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competitive activities.

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     (13) "Local cable system" means a cable system, as defined in 47 U.S.C. 522, as from

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time to time amended, operating in the state.

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     (7)(14) "Low-wage employee" means an employee whose average annual earnings, as

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defined in subsection (2), are not more than two hundred fifty percent (250%) of the federal

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poverty level for individuals as established by the United States Department of Health and

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Human Services federal poverty guidelines.

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     (8)(15) "Noncompetition agreement" means an agreement between an employer and an

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employee, or otherwise arising out of an existing or anticipated employment relationship, under

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which the employee or expected employee agrees that he or she will not engage in certain

 

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specified activities competitive with his or her employer after the employment relationship has

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ended. Noncompetition agreements include forfeiture for competition agreements, but do not

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include:

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     (i) Covenants not to solicit or hire employees of the employer;

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     (ii) Covenants not to solicit or transact business with customers, clients, or vendors of the

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employer;

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     (iii) Noncompetition agreements made in connection with the sale of a business entity or

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all or substantially all of the operating assets of a business entity or partnership, or otherwise

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disposing of the ownership interest of a business entity or partnership, or division or subsidiary of

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any of the foregoing, when the party restricted by the noncompetition agreement is a significant

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owner of, or member or partner in, the business entity who will receive significant consideration

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or benefit from the sale or disposal;

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     (iv) Noncompetition agreements originating outside of an employment relationship;

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     (v) Forfeiture agreements;

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     (vi) Nondisclosure or confidentiality agreements;

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     (vii) Invention assignment agreements;

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     (viii) Noncompetition agreements made in connection with the cessation of or separation

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from employment if the employee is expressly granted seven (7) business days to rescind

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acceptance; or

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     (ix) Agreements by which an employee agrees to not reapply for employment to the same

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employer after termination of the employee.

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     (9)(16) "Trade secret" means information as defined in § 6-41-1.

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     28-59-3. Enforceability. [Effective January 15, 2020.]

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     (a) A noncompetition agreement shall not be enforceable against the following types of

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workers:

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     (1) An employee who is classified as nonexempt under the Fair Labor Standards Act, 29

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U.S.C. § 201-219;

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     (2) Undergraduate or graduate students who participate in an internship or otherwise

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enter a short-term employment relationship with an employer, whether paid or unpaid, while

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enrolled at an educational institution;

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     (3) Employees age eighteen (18) or younger; or

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     (4) A low-wage employee.

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     (b) No broadcast industry employer employment contract for the services of a broadcast

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employee may contain a provision requiring that such broadcast employee:

 

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     (1) Refrain from obtaining employment in a specified geographical area for a specified

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period of time after termination of employment with that broadcast industry employer;

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     (2) Disclose the terms or conditions of an offer of employment, or the existence of any

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such offer, from any other broadcast industry employer following the expiration of the term of the

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employment contract; or

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     (3) Agree to enter into a subsequent employment contract with the broadcast industry

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employer, or extend or renew the existing employment contract, upon the same terms and

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conditions offered by a prospective employer.

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     (c) Any person who is aggrieved by a violation of this section may bring a civil action in

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the superior court to recover damages, together with court costs and reasonable attorneys' fees.

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     (b)(d) This section does not render void or unenforceable the remainder of a contract or

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agreement containing the unenforceable noncompetition agreement, nor does it preclude the

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imposition of a noncompetition restriction by a court, whether through preliminary or permanent

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injunctive relief or otherwise, as a remedy for a breach of another agreement or of a statutory or

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common law duty.

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     (c)(e) Nothing in this section shall preclude an employer from entering into an agreement

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with an employee not to share any information, including after the employee is no longer

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employed by the employer, regarding the employer or the employment that is a trade secret.

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     (f) The provisions of this section shall apply to employment contracts entered into,

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renewed, or extended on or after January 1, 2021.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO LABOR AND LABOR RELATIONS - NONCOMPETITION AGREEMENTS

- BROADCAST EMPLOYEES

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     This act would prohibit the inclusion of noncompetition agreements in broadcast industry

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employment contracts that are entered into after January 1, 2021.

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     This act would take effect upon passage.

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