SB1161 expands Hawaii’s existing ban on restrictive employment covenants. Current law already prohibits non-compete and non-solicit clauses for employees of technology businesses; this bill would extend that prohibition to employees of restaurants and retail stores. It also defines the covered terms, including “restaurant,” “technology business,” “non-compete clause,” and “non-solicit clause,” and makes clear that any prohibited clause in a covered employment contract would be void and without legal effect.
The bill’s stated purpose is to improve worker mobility, wages, and bargaining power by preventing employers in these sectors from restricting employees’ ability to change jobs or work in the same field after leaving employment. The findings section cites prior Hawaii experience with the technology-sector ban and references research suggesting increased job mobility and higher new-hire wages after that earlier reform. The bill would apply retroactively to July 1, 2015, meaning it would reach back to the date of the original technology-sector non-compete law.
Impact
If enacted, SB1161 would amend section 480-4 of the Hawaii Revised Statutes to add restaurants and retail stores to the list of employers whose employment contracts may not contain non-compete or non-solicit clauses. That would invalidate existing covered clauses and bar future use of those restrictions in the restaurant and retail sectors, while leaving the technology-business prohibition in place. The retroactive effective date could affect the enforceability of clauses dating back to 2015 and may have implications for existing contracts, employer compliance practices, and employee mobility rights in the affected industries.
Sentiment
The bill text reflects a strongly supportive posture toward limiting non-compete agreements, emphasizing worker mobility, higher wages, and reduced barriers to employment. No committee transcripts or recorded votes were provided, so there is no additional evidence of opposition or support from hearings or floor action. Based on the bill’s findings and framing, the measure appears to be presented as a pro-worker, pro-competition reform.
Contention
The main policy tension is between protecting employees’ freedom to move between jobs and employers’ interest in using restrictive covenants to protect business relationships and reduce turnover. Supporters of the bill are likely to focus on low-wage workers in restaurants and retail, wage growth, and reduced legal burdens, while opponents would likely argue that non-compete and non-solicit clauses can protect investments in training, customer relationships, and proprietary business interests. The retroactive application may also be a point of contention because it could unsettle existing agreements and raise questions about past enforcement.
A resolution to direct the Clerk of the House of Representatives to only present to the Governor enrolled House bills finally passed by both houses of the One Hundred Third Legislature.
Relating to nonsubstantive additions to, revisions of, and corrections in enacted codes, to the nonsubstantive codification or disposition of various laws omitted from enacted codes, and to conforming codifications enacted by the 88th Legislature to other Acts of that legislature.