Lawmakers discuss length of noncompete agreements

By Thomas Moore

Monday, Feb. 27, 2017 | 4:50 p.m.

Nevada Assembly members discussed a bill on Monday that restricts how long employers can prevent former employees from working for other companies by using what are known as noncompete agreements.

The Assembly Committee on Labor and Commerce heard Assembly Bill 149, sponsored by Assemblyman Richard Carrillo, D-Las Vegas, that codifies standards used by the Nevada Supreme Court and mandates that noncompetes (as they’re informally called) can’t be any longer than three months.

Nevada’s Supreme Court has ruled on noncompetes at least three times over the years most recently in 2016, when it heard the case of a Reno casino host.

The question before the Supreme Court last year was whether a noncompete agreement could stop a casino host from working at a casino within 150 miles of her previous employer for more than one year. The court ruled 4-3 that the clause went "overbroad."

Carrillo said that the point of this bill is to “ensure that Nevada workers are able to keep a roof over their heads and food on the table for their families.”

During the hearing, committee members asked Carrillo if the bill criminalizes employer actions that would normally be matters for civil court and if the bill was strong enough in protecting trade secrets and other confidential employer information.

Representatives from chambers of commerce in Las Vegas and Reno, as well as from the Nevada Resort Association and the Nevada Hospital Association, testified before the committee and all expressed concerns that the three-month limit was too short.

On Monday, the Senate also introduced a bill to addresses noncompete agreement issues.

Senate Bill 222 says noncompetes can’t be longer than a year and have to meet the Nevada Supreme Court standards about reasonableness. Also, employers can only have noncompetes with employees who have access to confidential information.