North Carolina HB 973: Uniform Restrictive Employment Agreement Act.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 973

Short Title: Uniform Restrictive Employment Agreement Act. (Public)
Sponsors: Representatives Longest, Cohn, Dahle, and Harrison (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Rules, Calendar, and Operations of the House
April 14, 2025
*H973-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ENACT THE UNIFORM RESTRICTIVE EMPLOYMENT AGREEMENT ACT. 2
The General Assembly of North Carolina enacts: 3
SECTION 1. The General Statutes are amended by adding a new Chapter to read: 4
"Chapter 1H. 5
"Uniform Restrictive Employment Agreement Act. 6
"§ 1H-1. Title. 7
This Chapter shall be known and may be cited as the "Uniform Restrictive Employment 8
Agreement Act." 9
"§ 1H-2. Definitions. 10
The following definitions apply in this Chapter: 11
(1) Confidentiality agreement. – A restrictive employment agreement that: 12
a. Prohibits a worker from using or disclosing information; and 13
b. Is not a condition of settlement or other resolution of a dispute. 14
(2) Electronic. – Relating to technology having electrical, digital, magnetic, 15
wireless, optical, electromagnetic, or similar capabilities. 16
(3) Employer. – A person that hires or contracts with a worker to work for the 17
person. 18
(4) No-business agreement. – A restrictive employment agreement that prohibits 19
a worker from working for a client or customer of the employer. 20
(5) Noncompete agreement. – A restrictive employment agreement that prohibits 21
a worker from working other than for the employer. The term does not include 22
a no-business agreement. 23
(6) Nonsolicitation agreement. – A restrictive employment agreement that 24
prohibits a worker from soliciting a client or customer of the employer. 25
(7) No-recruit agreement. – A restrictive employment agreement that prohibits a 26
worker from hiring or recruiting another worker of the employer. 27
(8) Payment-for-competition agreement. – A restrictive employment agreement 28
that imposes an adverse financial consequence on a worker for working other 29
than for the employer but does not expressly prohibit the work. 30
(9) Person. – An individual, estate, business or nonprofit entity, or other legal 31
entity. The term does not include a public corporation or government or 32
governmental subdivision, agency, or instrumentality. 33
(10) Record. – Information inscribed on a tangible medium or stored in an 34
electronic or other medium and retrievable in perceivable form. 35

General Assembly Of North Carolina Session 2025
Page 2 House Bill 973-First Edition
(11) Restrictive employment agreement. – An agreement or part of another 1
agreement between an employer and worker that prohibits, limits, or sets a 2
condition on working other than for the employer after the work relationship 3
ends or a sale of a business is consummated. The term includes a 4
confidentiality agreement, no-business agreement, noncompete agreement, 5
nonsolicitation agreement, no-recruit agreement, payment-for-competition 6
agreement, and training-repayment agreement. 7
(12) Sale of a business. – Sale, merger, consolidation, or amalgamation of all or 8
part of a business or nonprofit entity or association, or all or part of its assets, 9
or of a substantial ownership interest in the entity or association. 10
(13) Sign. – To, with present intent to authenticate or adopt a record, execute or 11
adopt a tangible symbol, or attach to or logically associate with the record an 12
electronic symbol, sound, or process. 13
(14) Signed agreement. – A restrictive employment agreement signed by the 14
worker and employer. 15
(15) Special training. – Instruction or other education a worker receives from a 16
source other than the employer that is designed to enhance the ability of the 17
worker to perform the worker's work, is not normally received by other 18
workers, and requires a significant and identifiable expenditure by the 19
employer distinct from ordinary on-the-job training. 20
(16) Stated rate of pay. – The compensation, calculated on an annualized basis, an 21
employer agrees to pay a worker. The term includes a wage, salary, 22
professional fee, other compensation for personal service, and the fair market 23
value of all remuneration other than cash. The term does not include: 24
a. A healthcare benefit, severance pay, retirement benefit, or expense 25
reimbursement; 26
b. Distribution of earnings and profit that is not compensation for 27
personal service; or 28
c. Anticipated but indeterminable compensation, including a tip, bonus, 29
or commission. 30
(17) Trade secret. – As defined in G.S. 66-152(3). 31
(18) Training-repayment agreement. – A restrictive employment agreement that 32
requires a worker to repay the employer for training costs incurred by the 33
employer. 34
(19) Work. – Providing service. 35
(20) Worker. – An individual who works for an employer. The term includes an 36
employee, i