Over the past several years, Connecticut’s legislature has enacted some significant employment laws that have re-shaped the workplace and posed new challenges for Connecticut employers. The 2023 legislative session that began in January looks to be no exception. As anticipated, some measures that were not successful last year have resurfaced in the upcoming legislative session. This Lightbulb highlights two proposed bills to keep an eye on.

• Connecticut Proposes Legislation Requiring Pay Transparency in Job Postings.  Pay transparency legislation that requires employers to disclose certain compensation or wage range information is an emerging trend among states and localities. The Connecticut General Assembly is currently considering a new bill which, if enacted, would further contribute to this trend and would amend Connecticut’s existing pay equity law—which already requires the disclosure of certain wage range information to applicants and employees.

On January 19, 2023, Connecticut legislators proposed H.B. 6273, which would mandate disclosure of wage ranges earlier in the process and to a broader audience by requiring wage ranges be included in both internal and external job postings. Connecticut seems to be following the lead of states and localities like New York City, New York State, Colorado, California, and Washington, all of which have recently enacted laws requiring the disclosure of pay ranges in job postings. If passed and signed into law, H.B. 6273 would make an employer’s wage range information available not only to applicants and employees, but also to the general public. If this proposed bill does gain traction, it could have significant implications for Connecticut employers. Regardless of whether this bill passes, however, Connecticut employers that have not yet done so should be sure to establish the “wage range” for each relevant position within their organization in accordance with Connecticut’s existing salary range disclosure law, by referencing either an applicable pay scale, previously determined wage range, or budgeted amount for the position or actual wage ranges for current employees holding comparable positions.

The proposed bill has been referred to the Joint Committee on Labor and Public Employees and was discussed during a public hearing on February 7, 2023. We will continue to monitor its progress closely. Please stay tuned for additional developments.

• Connecticut Legislature Targets Noncompete Agreements. Recent proposals at both federal and state levels may effectively lead to the ban of non-compete agreements other than in very limited circumstances.

The Federal Trade Commission (FTC) recently proposed a new rule, which, if made final, would prohibit non-compete agreements except in limited circumstances. The rule as proposed would make it an “unfair method of competition” for an employer to maintain, enter into, or attempt to enter into, a non-compete clause with an employee. The rule would also make it an “unfair method of competition” for an employer to represent to an employee that the employee is subject to an enforceable non-compete clause where the employer has no good-faith basis to believe as much. The proposed FTC rule defines a “non-compete clause” as “a contractual term between an employer and a worker that prevents the worker from seeking or accepting employment with a person, or operating a business, after the conclusion of the worker’s employment with the employer.” Notably, this broad definition goes beyond traditional non-competes and would apply to any other agreement or provision that the FTC determines would function as or serve the same purpose as a non-compete. The proposed rule’s restrictions would also apply to independent contractors, interns, and volunteers. While concerning for employers, this rule is not yet final, and it will likely be subject to numerous legal challenges if and when it becomes final.We are closely monitoring developments related to this proposed rule.

At the state level, there has also been significant movement towards passing legislation that would further restrict non-compete agreements in Connecticut. While Connecticut currently has no statute or regulation that governs non-competes generally, there are several statutes that restrict or prohibit non-competes in specific industries or professions, such as security guards, broadcast employees, and physicians. In other cases, enforceability of non-competes is governed by the reasonableness of the agreement and courts look at factors such as their length of time, geographic scope, and the extent of the restraint on the employee’s ability to pursue their occupation. Although attempts to pass legislation to restrict non-competes did not pass in the 2022 legislative session, Connecticut’s Labor and Public Employees Committee recently introduced a similar proposal, H.B. 6594. The proposed bill would effectively invalidate noncompete agreements except in limited circumstances, including that the non-compete: (1) applies to an exempt employee; (2) is limited to one year in duration; (3) is necessary to protect a “legitimate business interest” of the employer that could not be protected by less restrictive means; and (4) is no more restrictive than necessary to protect a legitimate business interest in terms of the duration, geographic scope, type of work and type of employer. The impact of H.B. 6594 or similar bill on employers in Connecticut, alone or in conjunction with the FTC’s proposed rule, would be significant. We are monitoring developments closely and will report back with any updates.