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Can I require employees to sign non-compete agreements in Hawaii? What are the requirements?

Non-compete agreements in Hawaii

Hawaii has specific laws regarding non-compete agreements. According to HRS 480-4(d), non-compete agreements are void unless they meet certain requirements. The statute states that a non-compete agreement is enforceable only if it is:

  1. Ancillary to a legitimate business interest of the employer;
  2. Reasonable in time, area, and line of business; and
  3. Not contrary to public policy.

Legitimate business interest

A non-compete agreement is considered ancillary to a legitimate business interest if it is necessary to protect one or more of the following:

  1. Trade secrets;
  2. Confidential information;
  3. Goodwill; or
  4. Other business interests.

Reasonable in time, area, and line of business

A non-compete agreement must be reasonable in time, area, and line of business. This means that the agreement must not be overly restrictive and must be limited to what is necessary to protect the employer’s legitimate business interests.

Not contrary to public policy

A non-compete agreement must not be contrary to public policy. This means that the agreement must not be harmful to the public interest.

Collective Bargaining Agreements

It is important to note that non-compete agreements cannot be included in collective bargaining agreements unless they meet the requirements outlined in HRS 480-4(d). Additionally, employees have the right to self-organization and the right to form, join, or assist any employee organization for the purpose of bargaining collectively through representatives of their own choosing on questions of wages, hours, and other terms and conditions of employment, and to engage in lawful, concerted activities for the purpose of collective bargaining or other mutual aid or protection, free from interference, restraint, or coercion [1.2][2.1].

Conclusion

In summary, non-compete agreements are generally void in Hawaii unless they meet certain requirements. They must be ancillary to a legitimate business interest, reasonable in time, area, and line of business, and not contrary to public policy. Non-compete agreements cannot be included in collective bargaining agreements unless they meet the requirements outlined in HRS 480-4(d). If you have further questions or concerns, it is recommended that you consult with a licensed attorney in Hawaii.

[1.2][2.1][1.5]

Source(s):
Jurisdiction

Hawaii