AN ACT relating to contracts.

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AN ACT relating to contracts. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 336 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this section: 5
(a) "Covenant not to compete": 6
1. Means a covenant or agreement, including a provision of a contract of 7
employment, between an employer and employee that restr ains, 8
prohibits, or otherwise restricts an individual's ability, following the 9
termination of the individual's employment, to compete with his or her 10
former employer; and 11
2. Includes but is not limited to a covenant or agreement that restricts an 12
employee from providing a service to a customer or client of the 13
employer if the employee does not initiate contact with or solicit the 14
customer or client; and 15
(b) "Covered employee": 16
1. Means an employee whose average weekly earnings, calculated by 17
dividing the employee's earnings during the period of fifty -two (52) 18
weeks immediately preceding the date of termination of employment 19
by fifty-two (52), or if an employee worked fewer than fifty-two (52) 20
weeks, by the number of weeks that the employee was actually paid 21
during the fifty -two (52) week period, are less than two thousand 22
dollars ($2,000); and 23
2. Includes: 24
a. Interns, students, apprentices, or trainees employed, with or 25
without pay, at a trade or occupation in order to gain work or 26
educational experience; and 27
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b. An individual who has independently contracted with another 1
person to perform services independent of an employment 2
relationship. 3
(2) No employer shall enter into, enfo rce, or threaten to enforce a covenant not to 4
compete with any covered employee. 5
(3) A covered employee may bring a civil action against any former employer or 6
other person that attempts to enter into, enforce, or threaten to enforce a 7
covenant not to compete against him or her in violation of this section. 8
(4) An action under this section shall be brought within two (2) years of the later of 9
the date the: 10
(a) Covenant not to compete was signed; 11
(b) Covered employee learns of the covenant not to compete; 12
(c) Employment relationship is terminated; or 13
(d) Employer takes any step to enforce the covenant not to compete. 14
(5) The court shall have jurisdiction to void any covenant not to compete with a 15
covered employee and to order all appropriate relief, including an order enjoining 16
the conduct of any person or employer, awarding damages, and reasonable 17
attorney fees and costs. 18
(6) No employer may discharge, threaten, or otherwise discriminate or retaliate 19
against a covered employee for bringing a civil action pursuant to this section. 20
(7) Every employer shall post a copy of this section or a summary approved by the 21
commissioner in the same location where other employee notices required by 22
state or federal law are posted. 23
(8) The provisions of this section shall app ly to covenants not to compete that are 24
entered into on or after the effective date of this Act. 25
Section 2. KRS 336.990 is amended to read as follows: 26
(1) Upon proof that any person employed by the Education and Labor Ca binet as a 27
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labor inspector has taken any part in any strike, lockout or similar labor dispute, the 1
person shall forfeit his or her office. 2
(2) The following civil penalties shall be imposed, in accordance with the provisions in 3
KRS 336.985, for violations of the provisions of this chapter: 4
(a) Any person who violates KRS 336.110 or 336.130 shall for each offense be 5
assessed a civil penalty of not less than one hundred dollars ($100) nor more 6
than one thousand dollars ($1,000); 7
(b) Any corporation, associati on, organization, or person that violates KRS 8
336.190 and 336.200 shall be assessed a civil penalty of not less than one 9
hundred dollars ($100) nor more than one thousand dollars ($1,000) for each 10
offense. Each act of violation, and each day during which s uch an agreement 11
remains in effect, shall constitute a separate offense; 12
(c) Any employer who violates the provisions of KRS 336.220 or subsection (7) 13
of Section 1 of this Act shall be assessed a civil penalty of not less than one 14
hundred dollars ($100) no r more than one thousand dollars ($1,000) for each 15
violation;[ and] 16
(d) Any labor organization who violates KRS 336.135 shall be assessed a civil 17
penalty of not less than one hundred dollars ($100) nor more than one 18
thousand dollars ($1,000) for each offense; and[.] 19
(e) Any public employer or labor organization that violates KRS 161.158, 20
164.365, 336.133, 336.134, 336.1341, 336.135, or 336.180 shall be assessed a 21
civil penalty of not less than one hundred dollars ($100) nor more than one 22
thousand dollars ($1,000) for each offense. 23
(3) Any labor organization, employer, or other person who directly or indirectly 24
violates KRS 336.130(3) shall be guilty of a Class A misdemeanor. 25
(4) Any person aggrieved as a result of any violation or threatened violation of KRS 26
336.130(3) may seek abatement of the violation or threatened violation by 27
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petitioning a court of competent jurisdiction for injunctive relief and shall be 1
entitled to costs and reasonable attorney fees if he or she prevails in the action. 2
(5) Any person injured as a result of any violation or threatened violation of KRS 3
336.130(3) may recover all damages resulting from the violation or threatened 4
violation and shall be entitled to costs and reasonable attorney fees if he or she 5
prevails in the action. 6
(6) Any employer who violates subsection (2) or (6) of Section 1 of this Act shall be 7
assessed a civil penalty of not less than one thousand dollars ($1,000) nor more 8
than ten thousand dollars ($10,000) for each violation. 9