House Bill 973 would enact the Uniform Restrictive Employment Agreement Act and create a new Chapter 1H in the North Carolina General Statutes governing post-employment restrictions between employers and workers. The bill defines and regulates a broad range of restrictive employment agreements, including noncompete agreements, confidentiality agreements, nonsolicitation agreements, no-business agreements, no-recruit agreements, payment-for-competition agreements, and training-repayment agreements. It sets out detailed notice, disclosure, and signature requirements, including advance delivery of proposed agreements, a Department of Labor notice, and clear written terms describing the restricted activity.
The bill also imposes substantive limits on enforceability. It generally bars restrictive employment agreements for low-wage workers, makes many such agreements unenforceable when a worker is terminated without misconduct or resigns for good cause, and requires all covered agreements to be reasonable. It narrows when noncompetes, confidentiality restrictions, client/customer restrictions, employee-solicitation limits, recruitment bans, compensation penalties, and training repayment provisions may be enforced, and it caps their duration and scope. The bill further restricts choice-of-law and venue clauses, limits courts from rewriting overbroad agreements, and authorizes declaratory relief, attorneys’ fees, and civil penalties for employers that knowingly enter prohibited agreements.
HB973 would significantly change North Carolina employment law by replacing common-law treatment of restrictive covenants with a detailed statutory framework. It would add a new chapter to the General Statutes, preempt common law only as to covered restrictive employment agreements, and direct the Department of Labor to issue required worker notices. Employers would face new compliance obligations, and workers, former workers, and prospective employers would gain clearer statutory grounds to challenge overbroad or unlawful restrictions. The bill would also create a civil enforcement mechanism, including statutory damages of up to $5,000 per worker per agreement, and would affect the enforceability of existing and future restrictive covenants beginning January 1, 2026, with limited transitional rules.
The available legislative record shows no committee debate or recorded votes, so there is no documented floor or committee sentiment beyond the bill’s introduction and referral. Based on the bill’s structure, the measure appears aimed at limiting employer use of restrictive covenants and expanding worker mobility, suggesting support from advocates of labor mobility and skepticism toward broad noncompete practices. The absence of recorded opposition or amendments in the provided materials means the public sentiment cannot be measured from the transcript or voting history included here.
The main points of contention are likely to be the bill’s broad restrictions on noncompete and related agreements, especially the low-wage worker ban, the limits on duration and scope, and the prohibition on courts modifying overbroad agreements to make them enforceable. Employers may object that the bill reduces protection for trade secrets, client relationships, and training investments, while workers and labor advocates are likely to support the tighter limits and notice requirements. Another likely dispute is the bill’s treatment of training-repayment agreements, choice-of-law and venue clauses, and the civil penalties for employers that knowingly use prohibited terms.