Bill Text: IA HF2134 | 2021-2022 | 89th General Assembly | Introduced
Bill Title: A bill for an act prohibiting employers from entering into noncompete agreements with employees under specified circumstances, and including applicability provisions.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2022-01-26 - Introduced, referred to Labor. H.J. 128. [HF2134 Detail]
Download: Iowa-2021-HF2134-Introduced.html
House
File
2134
-
Introduced
HOUSE
FILE
2134
BY
WILLS
and
JONES
A
BILL
FOR
An
Act
prohibiting
employers
from
entering
into
noncompete
1
agreements
with
employees
under
specified
circumstances,
and
2
including
applicability
provisions.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
NEW
SECTION
.
96A.1
Definitions.
1
As
used
in
this
chapter,
unless
the
context
otherwise
2
requires:
3
1.
“Employee”
means
a
natural
person
who
is
employed
in
this
4
state
for
wages
by
an
employer.
5
2.
“Employer”
means
a
person,
as
defined
in
chapter
4,
who
6
in
this
state
employs
for
wages
an
employee.
7
3.
“Noncompete
agreement”
means
an
agreement
between
an
8
employer
and
an
employee
that
restricts
the
employee
from
9
performing
any
of
the
following:
10
a.
Working
for
a
different
employer
for
a
specified
period
11
of
time.
12
b.
Working
for
a
different
employer
in
a
specified
13
geographical
area.
14
c.
Working
for
a
different
employer
that
is
similar
to
15
the
employee’s
work
for
the
employer
who
is
a
party
to
the
16
agreement.
17
4.
“Solicit”
or
“solicitation”
means
an
employee
wrongly
18
attempting
to
sell,
fraudulently
convey,
or
distribute
employer
19
property,
including
confidential
lists
and
trade
secrets.
20
Sec.
2.
NEW
SECTION
.
96A.2
Noncompete
agreements
with
21
employees
——
prohibition.
22
1.
An
employer
shall
not
require
an
employee
to
enter
into
23
a
noncompete
agreement
except
where
employer
financial
loss
or
24
trade
secrets
are
at
risk.
For
the
purposes
of
this
section,
25
“financial
loss”
means
a
potentially
significant
negative
26
financial
impact
or
consequence
incurred
by
an
employer
27
attributable
to
the
loss
of
an
employee’s
services
or
work
28
product.
For
the
purposes
of
this
section,
“financial
loss”
29
does
not
include
resources
used
in
the
course
of
employee
30
training.
31
2.
An
employer
may
require
that
the
employee
enter
into
a
32
nonsolicitation
agreement.
33
3.
A
noncompete
agreement
entered
into
between
an
employer
34
and
an
employee
on
or
after
the
effective
date
of
this
Act
35
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shall
be
void
and
unenforceable.
1
Sec.
3.
APPLICABILITY.
This
Act
applies
to
noncompete
2
agreements
entered
between
an
employer
and
an
employee
on
or
3
after
the
effective
date
of
this
Act.
4
EXPLANATION
5
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
6
the
explanation’s
substance
by
the
members
of
the
general
assembly.
7
This
bill
prohibits
an
employer
from
requiring
an
employee
8
to
enter
into
a
noncompete
agreement.
The
bill
provides
that
9
such
agreements
entered
into
on
or
after
the
effective
date
of
10
the
bill
shall
be
void
and
unenforceable.
11
The
bill
defines
“noncompete
agreement”
as
an
agreement
12
between
an
employer
and
an
employee
that
restricts
the
employee
13
from
performing
work
for
a
different
employer
for
a
specified
14
period
of
time,
work
in
a
specified
geographical
area,
or
work
15
for
a
different
employer
that
is
similar
to
the
employee’s
work
16
for
the
employer
who
is
a
party
to
the
agreement.
The
bill
17
allows
an
employer
to
enter
into
a
nonsolicitation
agreement
18
with
the
employee,
by
which
the
employee
must
refrain
from
19
sharing
confidential
information
with
outside
parties.
20
An
employer
may
enter
into
a
noncompete
agreement
with
an
21
employee
where
financial
loss
or
trade
secrets
are
at
risk.
22
The
bill
provides
that
financial
loss
includes
a
potentially
23
significant
negative
financial
impact
or
consequence
incurred
24
by
an
employer
attributable
to
the
loss
of
an
employee’s
25
services
or
work
product,
and
does
not
include
resources
used
26
to
train
an
employee.
27
The
bill
applies
to
noncompete
agreements
entered
into
on
or
28
after
the
effective
date
of
the
bill.
29
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