WEST virginia Legislature

2016 regular session

Introduced

Senate Bill 491

By Senators Takubo, Stollings and Plymale

[Introduced February 3, 2016;
Referred to the Committee on the Judiciary.]

A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §47-11A-12b, relating to noncompete clauses in contracts; providing that contract which restrains lawful profession, trade or business is void; and including exceptions.

Be it enacted by the Legislature of West Virginia:

That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §47-11A-12b, to read as follows:

ARTICLE 11A. UNFAIR TRADE PRACTICES.

§47-11A-12b.  No compete clauses illegal and unenforceable.

(a) Any contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind, except as provided in subsections (c) and (d) of this section is void and unenforceable.

(b) Any person who enters an agreement with an employer, whether in writing or verbally, not to compete with the employer after the employment relationship has been terminated, is permitted to engage in the same business as that conducted by the former employer or in a similar business as that conducted by the former employer as long as the former employee does not directly solicit the sale of goods, services or a combination of goods and services from the established customers of the former employer.

(c) Any person who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business within the areas provided in this subsection so long as the buyer or any person deriving title to the goodwill from the buyer carries on a like business in the described areas. The agreement authorized by this subsection may apply in:

(1) The city where the principal office of the business is located;

(2) The county where the principal office of the business is located;

(3) A city in any county adjacent to the county in which the principal office of the business is located;

(4) Any county adjacent to the county in which the principal office of the business is located; or

(5) Any combination of the areas set forth in subdivisions (1) through (4) of this subsection.

(d) Partners may, upon dissolution of the partnership, agree that one or more of them may not carry on a similar business within the areas provided in subsection (c) of this section.

NOTE: The purpose of this bill is to provide that a contract which restrains a lawful profession, trade or business is void and setting forth exceptions.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.