SB1161 would expand Hawaii’s existing ban on certain restrictive employment covenants by making non-compete and non-solicit clauses unenforceable in employment contracts for workers at restaurants and retail stores, in addition to the technology-sector coverage already in state law. The bill states that such clauses limit worker mobility, suppress wages, create legal costs, and can discourage job applicants, while also citing research that Hawaii’s earlier technology-industry ban was associated with higher job mobility and higher new-hire wages.
The measure amends Hawaii Revised Statutes section 480-4 to expressly prohibit employers from including non-compete or non-solicit clauses in contracts for employees of technology businesses, restaurants, or retail stores, and declares those clauses void and of no force and effect. It defines key terms such as “non-compete clause,” “non-solicit clause,” “restaurant,” “software development,” and “technology business,” and it specifies that the act would apply retroactively to July 1, 2015, which would reach back to the date of the earlier technology-sector ban.
Impact
If enacted, SB1161 would broaden Hawaii’s employment-contract restrictions by extending the state’s ban on non-compete and non-solicit provisions to restaurant and retail employees. It would directly affect employers in those sectors by preventing enforcement of such clauses and by voiding existing provisions covered by the statute, while also preserving the current technology-business prohibition. The retroactive effective date could create legal consequences for agreements dating back to July 1, 2015, potentially affecting contract enforcement and disputes over past restrictive covenants.
Sentiment
The bill text reflects a strongly pro-worker and pro-mobility policy rationale, emphasizing higher wages, better job mobility, and reduced barriers to employment. No committee transcript or vote record is provided, so there is no recorded floor or committee debate to indicate opposition or support beyond the bill’s stated findings. Based on the text alone, the measure appears designed to build on an earlier Hawaii policy that the legislature views as successful.
Contention
The main policy tension is between worker mobility and employer contract enforcement. Supporters, as reflected in the bill findings, would likely argue that non-compete and non-solicit clauses suppress wages, limit advancement, and burden workers with legal risk, especially in lower-wage sectors like restaurants and retail. Potential opponents would likely be restaurant and retail employers who rely on restrictive covenants to protect business relationships, workforce stability, or confidential information, and who may object to the retroactive application of the law.
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.