Are employee non-compete agreements enforceable in Hawaii?
A Hawaii employee non-compete is enforceable only if it is reasonable and ancillary to a legitimate purpose other than preventing competition, because HRS 480-4 treats it as a restraint of trade. On a touch screen, a tap shows all 4 sources in this group. Even then, a covenant is lawful only if its effect is not substantially to lessen competition or tend to create a monopoly .
The practical test is not ordinary contract reasonableness alone. Hawaii's Traeger framework asks whether the restraint is greater than required to protect the beneficiary, imposes undue hardship, or causes public injury that outweighs its benefit to the covenantee, and Gagnon says a covenant can satisfy those reasonableness factors and still fail if it is not ancillary to a legitimate purpose under HRS chapter 480. On a touch screen, a tap shows all 2 sources in this group.
That matters most for ordinary employee covenants. A restraint whose real purpose is to block new competition is not enough. The employer needs a protectable interest such as trade secrets, genuinely confidential information, special customer relationships, workforce stability for an employee-solicitation covenant, or specialized training combined with other protectable factors. On a touch screen, a tap shows all 2 sources in this group.
A Hawaii covenant whose real work is blocking ordinary competition, rather than protecting an identified legitimate interest, risks being unenforceable however tightly its duration and territory are drawn. On a touch screen, a tap shows all 2 sources in this group. An agreement that does not tie each restraint to such an interest leaves it outside the covenants HRS 480-4(c) permits .
Sources for this answer
HRS 480-4 supports Hawaii's baseline antitrust rule that in-state restraints of trade or commerce are illegal.
Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce in the State, or in any section of this State is illegal.
See Haw. Rev. Stat. 480-4(a).
HRS 480-4 supports the statutory framework allowing certain restrictive covenants only when ancillary to a legitimate chapter 480 purpose and not substantially anticompetitive.
Notwithstanding subsection (b) and without limiting the application of subsection (a), it shall be lawful for a person to enter into any of the following restrictive covenants or agreements ancillary to a legitimate purpose not violative of this chapter, unless the effect thereof may be substantially to lessen competition or to tend to create a monopoly in any line of commerce in any section of the State: (1) A covenant or agreement by the transferor of a business not to compete within a reasonable area and within a reasonable period of time in connection with the sale of the business; (2) A covenant or agreement between partners not to compete with the partnership within a reasonable area and for a reasonable period of time upon the withdrawal of a partner from the partnership; (3) A covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business or agricultural uses, or covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business uses and of the lessor to be restricted in the use of premises reasonably proximate to any such leased premises to certain business uses; (4) A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competition with the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the termination of employment, within such time as may be reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.
See Haw. Rev. Stat. 480-4(c).
Gagnon supports the rule that a Hawaii restrictive covenant must be ancillary to a legitimate purpose under chapter 480 even if it otherwise satisfies reasonableness factors.
Even if a restrictive covenant otherwise satisfies the Traeger three-factor reasonableness test, it is unenforceable unless it is ancillary to a legitimate purpose not violative of Chapter 480.
See Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022).
Gagnon supports the rule that preventing competition is not a legitimate ancillary purpose for a Hawaii non-compete.
Preventing competition, however, is not a legitimate ancillary purpose under HRS § 480-4(a).
See Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022).
Del Rosario supports treating specialized training as a possible legitimate interest only when combined with other protectable business interests.
Hence, as a matter of law, we hold that training that provides skills beyond those of a general nature is a legitimate interest which may be considered in weighing the reasonableness of a non-competition covenant, when combined with other factors weighing in favor of a protectable business interest such as trade secrets, confidential information, or special customer relationships.
See 7's Enterprises, Inc. v. Del Rosario, 111 Haw. 484, 143 P.3d 23 (2006).
Del Rosario, restating the Traeger rule, supports Hawaii's three-factor reasonableness test for restrictive covenants.
As observed in Traeger, courts will find a non-competition provision unreasonable if “ ‘(i) it is greater than required for the protection of the person for whose benefit it is imposed; (ii) it imposes undue hardship on the person restricted; or (iii) its benefit to the covenantee is outweighed by injury to the public.’ ”
See 7's Enterprises, Inc. v. Del Rosario, 111 Haw. 484, 143 P.3d 23 (2006).
What legitimate interests can support a Hawaii non-compete?
Trade secrets are expressly covered, and Hawaii cases also recognize a narrow set of non-statutory interests. HRS 480-4(c)(4) covers employee or agent covenants not to use employer trade secrets, while Gagnon and Del Rosario require a legitimate ancillary purpose beyond suppressing competition. On a touch screen, a tap shows all 3 sources in this group.
The statute lists several categories, each still subject to the same chapter 480 limits: business-sale covenants, partner-withdrawal covenants, lease-use covenants, and employee or agent covenants tied to trade-secret use. On a touch screen, a tap shows all 4 sources in this group.
Outside the text, Traeger says the statutory categories are not exclusive, but Gagnon adds the modern limiting rule: the covenant still must be ancillary to a legitimate purpose under chapter 480. On a touch screen, a tap shows all 2 sources in this group.
A confidentiality label pinned to ordinary market knowledge does not carry the covenant. In Gagnon the claimed confidential-interest theory failed where similarly situated workers were not restricted, the information was shared more broadly, and no trade-secret violation was shown, so a covenant resting on that kind of record is unenforceable rather than merely narrowed .
Sources for this answer
HRS 480-4 supports the employee or agent trade-secret covenant exception.
A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competition with the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the termination of employment, within such time as may be reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.
See Haw. Rev. Stat. 480-4(c)(4).
Gagnon supports the rule that preventing competition is not a legitimate ancillary purpose.
Preventing competition, however, is not a legitimate ancillary purpose under HRS § 480-4(a).
See Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022).
Del Rosario supports specialized training as a possible protectable interest only when combined with other protectable factors.
Hence, as a matter of law, we hold that training that provides skills beyond those of a general nature is a legitimate interest which may be considered in weighing the reasonableness of a non-competition covenant, when combined with other factors weighing in favor of a protectable business interest such as trade secrets, confidential information, or special customer relationships.
See 7's Enterprises, Inc. v. Del Rosario, 111 Haw. 484, 143 P.3d 23 (2006).
HRS 480-4 supports the sale-of-business covenant category.
Notwithstanding subsection (b) and without limiting the application of subsection (a), it shall be lawful for a person to enter into any of the following restrictive covenants or agreements ancillary to a legitimate purpose not violative of this chapter, unless the effect thereof may be substantially to lessen competition or to tend to create a monopoly in any line of commerce in any section of the State: (1) A covenant or agreement by the transferor of a business not to compete within a reasonable area and within a reasonable period of time in connection with the sale of the business; (2) A covenant or agreement between partners not to compete with the partnership within a reasonable area and for a reasonable period of time upon the withdrawal of a partner from the partnership; (3) A covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business or agricultural uses, or covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business uses and of the lessor to be restricted in the use of premises reasonably proximate to any such leased premises to certain business uses; (4) A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competition with the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the termination of employment, within such time as may be reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.
See Haw. Rev. Stat. 480-4(c)(1).
HRS 480-4 supports the partner-withdrawal covenant category.
Notwithstanding subsection (b) and without limiting the application of subsection (a), it shall be lawful for a person to enter into any of the following restrictive covenants or agreements ancillary to a legitimate purpose not violative of this chapter, unless the effect thereof may be substantially to lessen competition or to tend to create a monopoly in any line of commerce in any section of the State: (1) A covenant or agreement by the transferor of a business not to compete within a reasonable area and within a reasonable period of time in connection with the sale of the business; (2) A covenant or agreement between partners not to compete with the partnership within a reasonable area and for a reasonable period of time upon the withdrawal of a partner from the partnership; (3) A covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business or agricultural uses, or covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business uses and of the lessor to be restricted in the use of premises reasonably proximate to any such leased premises to certain business uses; (4) A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competition with the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the termination of employment, within such time as may be reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.
See Haw. Rev. Stat. 480-4(c)(2).
HRS 480-4 supports the lease-use restrictive covenant category.
Notwithstanding subsection (b) and without limiting the application of subsection (a), it shall be lawful for a person to enter into any of the following restrictive covenants or agreements ancillary to a legitimate purpose not violative of this chapter, unless the effect thereof may be substantially to lessen competition or to tend to create a monopoly in any line of commerce in any section of the State: (1) A covenant or agreement by the transferor of a business not to compete within a reasonable area and within a reasonable period of time in connection with the sale of the business; (2) A covenant or agreement between partners not to compete with the partnership within a reasonable area and for a reasonable period of time upon the withdrawal of a partner from the partnership; (3) A covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business or agricultural uses, or covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business uses and of the lessor to be restricted in the use of premises reasonably proximate to any such leased premises to certain business uses; (4) A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competition with the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the termination of employment, within such time as may be reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.
See Haw. Rev. Stat. 480-4(c)(3).
Traeger supports the rule that HRS 480-4(c) categories are not exclusive.
Our understanding of the above committee report is that the restrictive covenants and agreements enumerated under § 480-4(c) were not meant to be exclusive in their respective fields.
See Technicolor, Inc. v. Traeger, 57 Haw. 113, 551 P.2d 163 (1976).
Gagnon supports requiring a legitimate ancillary purpose even after reasonableness review.
Even if a restrictive covenant otherwise satisfies the Traeger three-factor reasonableness test, it is unenforceable unless it is ancillary to a legitimate purpose not violative of Chapter 480.
See Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022).
Gagnon supports scrutinizing whether alleged confidential information is actually confidential and protected.
In addition, Locations did not produce any evidence of and did not dispute that there was no trade secret violation.
See Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022).
Are sale-of-business non-competes enforceable in Hawaii?
A Hawaii seller's covenant not to compete within a reasonable area and period in connection with the sale of a business is lawful under HRS 480-4(c)(1) when ancillary to a legitimate purpose, unless its effect may be substantially to lessen competition or to tend to create a monopoly. On a touch screen, a tap shows all 2 sources in this group. Hawaii courts also test such a covenant under the Traeger reasonableness factors .
The sale context is stronger than an ordinary employment restraint because the buyer is usually protecting purchased goodwill. Still, the covenant must be reasonable. Traeger frames reasonableness around protection needed, hardship on the restricted party, public injury, geography, time, and breadth. On a touch screen, a tap shows all 2 sources in this group.
A Hawaii sale covenant is measured against the goodwill and competitive risk actually transferred. HRS 480-4(c)(1) permits the transferor restraint only within a reasonable area and a reasonable period, and Traeger holds the restraint to no more than the protection needed, so a sale covenant sized beyond the goodwill it protects is exposed as unreasonable. On a touch screen, a tap shows all 2 sources in this group.
Sources for this answer
HRS 480-4 supports Hawaii's sale-of-business covenant exception.
Notwithstanding subsection (b) and without limiting the application of subsection (a), it shall be lawful for a person to enter into any of the following restrictive covenants or agreements ancillary to a legitimate purpose not violative of this chapter, unless the effect thereof may be substantially to lessen competition or to tend to create a monopoly in any line of commerce in any section of the State: (1) A covenant or agreement by the transferor of a business not to compete within a reasonable area and within a reasonable period of time in connection with the sale of the business; (2) A covenant or agreement between partners not to compete with the partnership within a reasonable area and for a reasonable period of time upon the withdrawal of a partner from the partnership; (3) A covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business or agricultural uses, or covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business uses and of the lessor to be restricted in the use of premises reasonably proximate to any such leased premises to certain business uses; (4) A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competition with the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the termination of employment, within such time as may be reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.
See Haw. Rev. Stat. 480-4(c)(1).
HRS 480-4 supports the broader antitrust limitation on restrictive covenants.
Notwithstanding subsection (b) and without limiting the application of subsection (a), it shall be lawful for a person to enter into any of the following restrictive covenants or agreements ancillary to a legitimate purpose not violative of this chapter, unless the effect thereof may be substantially to lessen competition or to tend to create a monopoly in any line of commerce in any section of the State: (1) A covenant or agreement by the transferor of a business not to compete within a reasonable area and within a reasonable period of time in connection with the sale of the business; (2) A covenant or agreement between partners not to compete with the partnership within a reasonable area and for a reasonable period of time upon the withdrawal of a partner from the partnership; (3) A covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business or agricultural uses, or covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business uses and of the lessor to be restricted in the use of premises reasonably proximate to any such leased premises to certain business uses; (4) A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competition with the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the termination of employment, within such time as may be reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.
See Haw. Rev. Stat. 480-4(c).
Del Rosario, restating the Traeger rule, supports Hawaii's three-factor reasonableness test for restrictive covenants.
As observed in Traeger, courts will find a non-competition provision unreasonable if “ ‘(i) it is greater than required for the protection of the person for whose benefit it is imposed; (ii) it imposes undue hardship on the person restricted; or (iii) its benefit to the covenantee is outweighed by injury to the public.’ ”
See 7's Enterprises, Inc. v. Del Rosario, 111 Haw. 484, 143 P.3d 23 (2006).
Del Rosario, restating Traeger, supports examining geographical scope, duration, and breadth when assessing reasonableness.
A court “must examine such factors as geographical scope, length of time, and breadth of the restriction placed on a given activity.”
See 7's Enterprises, Inc. v. Del Rosario, 111 Haw. 484, 143 P.3d 23 (2006).
What special non-compete rule applies to Hawaii technology-business employees?
HRS 480-4(d) prohibits a noncompete clause or a nonsolicit clause in any employment contract with an employee of a Hawaii technology business and makes such a clause void, except for a covenant not to use the employer's trade secrets under HRS 480-4(c)(4). On a touch screen, a tap shows all 2 sources in this group.
The definition focuses on the business, not just the employee title. A technology business is a trade or business deriving a majority of gross income from products or services resulting from software development, information technology development, or both .
The same definition excludes the broadcast industry and certain telecommunications carriers. The statute separately defines noncompete and nonsolicit clauses for this subsection. On a touch screen, a tap shows all 3 sources in this group.
A broad employment noncompete or employee nonsolicit imposed on a Hawaii technology-business employee is void and of no force and effect, because HRS 480-4(d) preserves only the HRS 480-4(c)(4) trade-secret path for a covered employee. A restraint built around actual trade-secret use is the one that survives; anything reaching further falls with the statutory ban. Because coverage keys to the employer's line of business rather than the worker's title, a successor whose revenue mix makes it a technology business brings the same ban to a covenant it inherits. On a touch screen, a tap shows all 2 sources in this group.
Sources for this answer
HRS 480-4 supports Hawaii's statutory ban on noncompete and nonsolicit clauses in employment contracts for technology-business employees, except for trade-secret covenants.
Except as provided in subsection (c)(4), it shall be prohibited to include a noncompete clause or a nonsolicit clause in any employment contract relating to an employee of a technology business. The clause shall be void and of no force and effect.
See Haw. Rev. Stat. 480-4(d).
HRS 480-4 supports the definition of technology business and its broadcast and telecommunications exclusions.
“Technology business” means a trade or business that derives the majority of its gross income from the sale or license of products or services resulting from its software development or information technology development, or both. A “technology business” excludes any trade or business that is considered by standard practice as part of the broadcast industry or any telecommunications carrier, as defined in section 269-1, that holds a franchise or charter enacted or granted by the legislative or executive authority of the State or its predecessor governments.
See Haw. Rev. Stat. 480-4(d).
HRS 480-4 supports the technology-business subsection's definition of noncompete clause.
“Noncompete clause” means a clause in an employment contract that prohibits an employee from working in a specific geographic area for a specific period of time after leaving employment with the employer.
See Haw. Rev. Stat. 480-4(d).
HRS 480-4 supports the technology-business subsection's definition of nonsolicit clause.
“Nonsolicit clause” means a clause in an employment contract that prohibits an employee from soliciting employees of the employer after leaving employment with the employer.
See Haw. Rev. Stat. 480-4(d).
HRS 480-4 supports preserving employee or agent trade-secret covenants.
A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competition with the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the termination of employment, within such time as may be reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.
See Haw. Rev. Stat. 480-4(c)(4).
Are customer or employee non-solicitation agreements enforceable in Hawaii?
A Hawaii customer or employee non-solicitation clause is enforceable only if it has a legitimate ancillary purpose, and HRS 480-4(d) voids an employee non-solicitation clause in a technology-business employee's contract outside the trade-secret exception. On a touch screen, a tap shows all 3 sources in this group. In Prudential Locations v. Gagnon, the Hawaii Supreme Court held that solicitation clauses are restraints of trade requiring such a purpose under HRS 480-4(a) . Gagnon also held that a solicitation violation requires an active initiation of contact .
The active-solicitation rule is important. Telling coworkers that the employee is leaving, or passively accepting a decision to follow, does not automatically prove solicitation. The employer needs evidence that the restricted person actively initiated the contact that allegedly breached the clause. On a touch screen, a tap shows all 2 sources in this group.
For technology-business employees, the statutory rule is stricter. HRS 480-4(d) voids nonsolicit clauses in covered employment contracts except for the trade-secret carve-out in HRS 480-4(c)(4). On a touch screen, a tap shows all 2 sources in this group.
A Hawaii solicitation covenant written as no-contact, no-service, or no-acceptance language reaches conduct that falls outside solicitation: Gagnon frames solicitation around active initiation of contact, so a covenant sweeping in passive dealing is a broader restraint that still must clear the legitimate-ancillary-purpose screen of HRS 480-4 and is exposed where it does not. On a touch screen, a tap shows all 2 sources in this group.
Sources for this answer
Gagnon supports the rule that solicitation clauses are restraints of trade requiring a legitimate ancillary purpose.
Solicitation clauses are also contracts in restraint of trade or commerce that require a legitimate ancillary purpose under HRS § 480-4(a).
See Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022).
Gagnon supports the rule that solicitation requires active initiation of contact.
Our law does not clearly define “solicitation.” We agree with reasoned opinions from other jurisdictions and now hold that “solicitation” requires an active initiation of contact.
See Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022).
Gagnon supports the rule that former coworkers joining a new venture does not automatically prove solicitation.
These agents’ termination of their employment with Locations and subsequent employment with Prestige do not automatically demonstrate a violation of the non-solicitation clause.
See Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022).
HRS 480-4 supports the statutory ban on nonsolicit clauses for covered technology-business employees, except for trade-secret covenants.
Except as provided in subsection (c)(4), it shall be prohibited to include a noncompete clause or a nonsolicit clause in any employment contract relating to an employee of a technology business. The clause shall be void and of no force and effect.
See Haw. Rev. Stat. 480-4(d).
HRS 480-4 supports preserving employee or agent trade-secret covenants.
A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competition with the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the termination of employment, within such time as may be reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.
See Haw. Rev. Stat. 480-4(c)(4).
What remedies or consequences can follow an unlawful Hawaii non-compete?
Hawaii chapter 480 has private remedies. A person injured in business or property by conduct forbidden by the chapter may sue for damages, may seek an injunction, and, if the judgment or decree is for the plaintiff, receives reasonable attorney fees and costs .
For damages claims under HRS 480-13(a), the award is at least $1,000 or threefold damages, whichever is greater, plus reasonable attorney fees and costs for a prevailing plaintiff. For injunction proceedings, a plaintiff who obtains the decree is also awarded reasonable attorney fees and costs .
The fee rule is therefore plaintiff-focused, not a general loser-pays rule. In a non-compete dispute, the party suing under chapter 480 must still show injury to business or property by something forbidden or declared unlawful by the chapter .
HRS 480-2 can also matter because it separately declares unfair methods of competition unlawful and allows any person to bring an action based on that theory. On a touch screen, a tap shows all 2 sources in this group.
Because the covenants in a Hawaii agreement are themselves analyzed as restraints of trade under chapter 480, a covenant that fails the HRS 480-4 framework is not merely unenforceable but a potential source of chapter 480 liability for the party pressing it. HRS 480-13(a) lets a person injured in business or property by anything the chapter forbids recover the greater of $1,000 or threefold damages plus reasonable attorney fees and costs on a plaintiff's judgment, and fees and costs again on a plaintiff's injunction decree — a plaintiff-focused, one-way regime the parties cannot draft around, and one that applies regardless of any contractual fee provision. On a touch screen, a tap shows all 2 sources in this group. HRS 480-2 separately declares unfair methods of competition unlawful and lets any person sue on that theory, so warning a future employer off an employee on the strength of a covenant that fails the restraint-of-trade screen carries its own exposure. On a touch screen, a tap shows all 2 sources in this group.
Sources for this answer
HRS 480-13 supports private damages, treble or statutory-minimum recovery, injunctive proceedings, and fee-and-cost awards for a prevailing plaintiff injured by conduct forbidden by chapter 480.
Except as provided in subsections (b) and (c), any person who is injured in the person's business or property by reason of anything forbidden or declared unlawful by this chapter: (1) May sue for damages sustained by the person, and, if the judgment is for the plaintiff, the plaintiff shall be awarded a sum not less than $1,000 or threefold damages by the plaintiff sustained, whichever sum is the greater, and reasonable attorney's fees together with the costs of suit; provided that indirect purchasers injured by an illegal overcharge shall recover only compensatory damages, and reasonable attorney's fees together with the costs of suit in actions not brought under section 480-14(c); and (2) May bring proceedings to enjoin the unlawful practices, and if the decree is for the plaintiff, the plaintiff shall be awarded reasonable attorney's fees together with the costs of suit.
See Haw. Rev. Stat. 480-13(a).
HRS 480-13 supports injunction proceedings and fee-and-cost awards for a prevailing plaintiff.
Except as provided in subsections (b) and (c), any person who is injured in the person's business or property by reason of anything forbidden or declared unlawful by this chapter: (1) May sue for damages sustained by the person, and, if the judgment is for the plaintiff, the plaintiff shall be awarded a sum not less than $1,000 or threefold damages by the plaintiff sustained, whichever sum is the greater, and reasonable attorney's fees together with the costs of suit; provided that indirect purchasers injured by an illegal overcharge shall recover only compensatory damages, and reasonable attorney's fees together with the costs of suit in actions not brought under section 480-14(c); and (2) May bring proceedings to enjoin the unlawful practices, and if the decree is for the plaintiff, the plaintiff shall be awarded reasonable attorney's fees together with the costs of suit.
See Haw. Rev. Stat. 480-13(a)(2).
HRS 480-2 supports Hawaii's separate prohibition on unfair methods of competition and unfair or deceptive acts or practices.
Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful.
See Haw. Rev. Stat. 480-2(a).
HRS 480-2 supports private actions by any person for unfair methods of competition.
Any person may bring an action based on unfair methods of competition declared unlawful by this section.
See Haw. Rev. Stat. 480-2(e).
Are trade-secret, confidentiality, and NDA alternatives available in Hawaii?
Hawaii law allows an employee or agent to agree not to use the employer's or principal's trade secrets in competition, for the time reasonably necessary to protect the employer or principal and without undue hardship on the employee or agent, under HRS 480-4(c)(4) .
Hawaii's trade-secret statute also preserves contractual remedies. HRS 482B-8 displaces conflicting tort, restitutionary, and other civil remedies for trade-secret misappropriation, but it does not affect contractual remedies, other non-misappropriation civil remedies, or criminal remedies. On a touch screen, a tap shows all 2 sources in this group.
The drafting point is to protect information rather than work. A confidentiality or NDA covenant is safer when it targets actual trade secrets or confidential information and avoids operating as a practical ban on ordinary employment competition. On a touch screen, a tap shows all 2 sources in this group.
An NDA drafted to do non-compete work does not hold up as one. Hawaii preserves trade-secret and contract remedies, but Gagnon rejected a confidentiality theory where the record showed no real protected information and no trade-secret violation, so a confidentiality covenant that operates as a practical ban on ordinary competition falls back into the HRS 480-4(a) antitrust baseline rather than standing as trade-secret protection. On a touch screen, a tap shows all 2 sources in this group.
Sources for this answer
HRS 480-4 supports employee or agent covenants that restrict use of employer or principal trade secrets in competition.
A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competition with the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the termination of employment, within such time as may be reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.
See Haw. Rev. Stat. 480-4(c)(4).
HRS 482B-8 supports Hawaii UTSA displacement of conflicting civil remedies for trade-secret misappropriation.
Except as provided in subsection (b) this chapter displaces conflicting tort, restitutionary, and other law of this State providing civil remedies for misappropriation of a trade secret.
See Haw. Rev. Stat. 482B-8(a).
HRS 482B-8 supports preserving contractual remedies whether or not based on trade-secret misappropriation.
This chapter does not affect: (1) Contractual remedies, whether or not based upon misappropriation of a trade secret; (2) Other civil remedies that are not based upon misappropriation of a trade secret; or (3) Criminal remedies, whether or not based upon misappropriation of a trade secret.
See Haw. Rev. Stat. 482B-8(b).
Gagnon supports requiring evidence that claimed confidential information is actually protected.
In addition, Locations did not produce any evidence of and did not dispute that there was no trade secret violation.
See Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022).
Does a Hawaii non-compete period toll during breach or litigation?
In our review we found no Hawaii decision deciding whether a non-compete's restricted period tolls while the former employee is allegedly breaching it or while enforcement litigation is pending. A tolling clause is therefore best analyzed as part of the effective duration of the restraint, which HRS 480-4(c) and the Traeger reasonableness factors test. On a touch screen, a tap shows all 2 sources in this group.
The reason is practical. A contractual extension-on-breach clause lengthens the actual restraint. Hawaii's framework asks whether the covenant is ancillary to a legitimate purpose, whether its effect may substantially lessen competition, and whether its geography, time, and breadth are reasonable. On a touch screen, a tap shows all 2 sources in this group.
A tolling or extension-on-breach clause is untested in the identified Hawaii sources, so its enforcement cannot be assumed. Because such a clause extends the effective restricted period, it is measured under the same HRS 480-4 antitrust and reasonableness limits that govern the covenant itself, and an extension pushing the covenant past a reasonable duration is exposed on the same ground the underlying restraint would be. On a touch screen, a tap shows all 2 sources in this group.
Sources for this answer
HRS 480-4 supports applying Hawaii's ancillary-purpose and anticompetitive-effect framework to the effective length of a restrictive covenant.
Notwithstanding subsection (b) and without limiting the application of subsection (a), it shall be lawful for a person to enter into any of the following restrictive covenants or agreements ancillary to a legitimate purpose not violative of this chapter, unless the effect thereof may be substantially to lessen competition or to tend to create a monopoly in any line of commerce in any section of the State: (1) A covenant or agreement by the transferor of a business not to compete within a reasonable area and within a reasonable period of time in connection with the sale of the business; (2) A covenant or agreement between partners not to compete with the partnership within a reasonable area and for a reasonable period of time upon the withdrawal of a partner from the partnership; (3) A covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business or agricultural uses, or covenant or agreement of the lessee to be restricted in the use of the leased premises to certain business uses and of the lessor to be restricted in the use of premises reasonably proximate to any such leased premises to certain business uses; (4) A covenant or agreement by an employee or agent not to use the trade secrets of the employer or principal in competition with the employee's or agent's employer or principal, during the term of the agency or thereafter, or after the termination of employment, within such time as may be reasonably necessary for the protection of the employer or principal, without imposing undue hardship on the employee or agent.
See Haw. Rev. Stat. 480-4(c).
Del Rosario, restating Traeger, supports examining geographical scope, duration, and breadth as part of restrictive-covenant reasonableness.
A court “must examine such factors as geographical scope, length of time, and breadth of the restriction placed on a given activity.”
See 7's Enterprises, Inc. v. Del Rosario, 111 Haw. 484, 143 P.3d 23 (2006).
Del Rosario, restating the Traeger rule, supports Hawaii's three-factor reasonableness test for restrictive covenants.
As observed in Traeger, courts will find a non-competition provision unreasonable if “ ‘(i) it is greater than required for the protection of the person for whose benefit it is imposed; (ii) it imposes undue hardship on the person restricted; or (iii) its benefit to the covenantee is outweighed by injury to the public.’ ”
See 7's Enterprises, Inc. v. Del Rosario, 111 Haw. 484, 143 P.3d 23 (2006).
Will Hawaii courts narrow or reform an overbroad non-compete?
In our review we found no Hawaii decision holding that courts will rewrite an overbroad employee non-compete into an enforceable one. Hawaii courts decide a covenant's reasonableness as a matter of law, and the Hawaii Supreme Court in Del Rosario limited an injunction to the County of Honolulu. On a touch screen, a tap shows all 2 sources in this group.
Del Rosario is the best example in the identified sources of a court correcting the enforced scope. The trial court had enjoined work as a briefer statewide, but the covenant itself was limited to the County of Honolulu, and the appellate court remanded to amend the judgment to that county limit .
That is not the same as permission to draft broadly. Gagnon refused enforcement of a non-compete that lacked a legitimate ancillary purpose, even though the employer argued confidentiality and competition concerns. On a touch screen, a tap shows all 2 sources in this group. For a clause-by-clause pass over a specific agreement against these drafting rules, the Hawaii non-compete reviewer checklist walks the full covenant suite item by item with each requirement's force level.
A Hawaii restriction stands on the minimum scope its protected interest supports, not on the expectation that a court will rescue an overbroad one. A court may trim an injunction to the contract and record before it, but Gagnon shows that a covenant lacking a legitimate ancillary purpose fails outright rather than being saved by narrower wording, so scope drawn beyond the interest is exposed rather than reformed. On a touch screen, a tap shows all 2 sources in this group.
Sources for this answer
Traeger supports Hawaii's reasonableness analysis for restrictive covenants.
This “reasonableness analysis” is done by the court, as a matter of law, and not as appellant contends, by a jury, as a matter of fact.
See Technicolor, Inc. v. Traeger, 57 Haw. 113, 551 P.2d 163 (1976).
Del Rosario supports limiting the injunction to the County of Honolulu where the covenant itself had that geographic limit.
The case is remanded to the court to amend its judgment to reflect that the injunction involved herein is limited to the County of Honolulu.
See 7's Enterprises, Inc. v. Del Rosario, 111 Haw. 484, 143 P.3d 23 (2006).
Gagnon supports the rule that lack of a legitimate ancillary purpose makes a covenant unenforceable.
Even if a restrictive covenant otherwise satisfies the Traeger three-factor reasonableness test, it is unenforceable unless it is ancillary to a legitimate purpose not violative of Chapter 480.
See Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022).
Gagnon supports the rule that preventing competition is not a legitimate ancillary purpose.
Preventing competition, however, is not a legitimate ancillary purpose under HRS § 480-4(a).
See Prudential Locations, LLC v. Gagnon, 151 Haw. 136, 509 P.3d 1099 (2022).
What does federal law require a non-compete or confidentiality agreement in Hawaii to say about whistleblowers and pay?
An employee confidentiality, non-compete, or invention assignment agreement signed or updated now that governs trade secrets or other confidential information must give the Defend Trade Secrets Act whistleblower-immunity notice, and for employees the National Labor Relations Act covers, Section 7 of that Act protects concerted activity, including joining together over pay and working conditions, that a broad confidentiality clause can restrict. The employer may satisfy the notice duty by cross-referencing a qualifying policy document provided to the employee, but an employer that omits the notice may not be awarded exemplary damages or attorney fees under the Defend Trade Secrets Act in an action against an employee who was not given notice.
The notice describes a federal immunity: an individual cannot be held liable under federal or state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal. For an agreement signed or updated now, the duty to give that notice reaches any agreement with an employee that governs trade secrets or other confidential information, whatever else the agreement does.
Section 7 gives employees the National Labor Relations Act covers a statutory right to engage in concerted activity for mutual aid or protection, including joining together to improve pay and working conditions. For employees the Act covers, the Board's work-rule standard adopted in 2023 makes a rule presumptively unlawful if it has a reasonable tendency to chill employees from exercising their Section 7 rights; an employer can rebut that presumption only by showing a legitimate and substantial business interest it cannot serve with a more narrowly tailored rule. The 2023 standard may change, but the Section 7 right it enforces is statutory. State law may add its own requirements for the same clauses.
A form carried over without the immunity notice, or a cross-reference to a reporting policy the employee never received, leaves the confidentiality clause without a valid notice, so the Act's exemplary damages and attorney fees are unavailable against that employee. A Confidential Information definition that sweeps in pay and working conditions with no carve-out exposes the employer to an unfair-labor-practice finding for employees the Act covers.
Sources for this answer
An individual is immune from criminal and civil liability under federal and state trade-secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal.
An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that— (A) is made— (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
See 18 U.S.C. § 1833(b)(1).
An employer must give notice of the trade-secret whistleblower immunity in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
An employer shall provide notice of the immunity set forth in this subsection in any contract or agreement with an employee that governs the use of a trade secret or other confidential information.
See 18 U.S.C. § 1833(b)(3)(A).
An employer complies with the notice requirement by cross-referencing a policy document, provided to the employee, that sets out the employer's reporting policy for a suspected violation of law.
An employer shall be considered to be in compliance with the notice requirement in subparagraph (A) if the employer provides a cross-reference to a policy document provided to the employee that sets forth the employer's reporting policy for a suspected violation of law.
See 18 U.S.C. § 1833(b)(3)(B).
An employer that does not give the required notice may not be awarded exemplary damages or attorney fees in a trade-secret action against an employee who did not receive it.
If an employer does not comply with the notice requirement in subparagraph (A), the employer may not be awarded exemplary damages or attorney fees under subparagraph (C) or (D) of section 1836(b)(3) in an action against an employee to whom notice was not provided.
See 18 U.S.C. § 1833(b)(3)(C).
Section 7 gives employees the right to engage in concerted activities for mutual aid or protection, the statutory basis for keeping discussion of pay and working conditions outside confidentiality restrictions.
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.
See 29 U.S.C. § 157 (NLRA § 7).
The National Labor Relations Board protects the right of private-sector employees, with or without a union, to join together to improve wages, benefits, and working conditions.
Established in 1935, the National Labor Relations Board is an independent federal agency that protects employees from unfair labor practices and protects the right of private sector employees to join together, with or without a union, to improve wages, benefits and working conditions.
See NLRB Office of Public Affairs, news release of Feb. 21, 2023 (agency mission statement).
Under the work-rule standard the Board adopted in 2023, a rule with a reasonable tendency to chill employees from exercising their Section 7 rights is presumptively unlawful unless the employer proves a legitimate and substantial business interest it cannot advance with a more narrowly tailored rule.
Under the new standard adopted in Stericycle, the General Counsel must prove that a challenged rule has a reasonable tendency to chill employees from exercising their rights. If the General Counsel does so, then the rule is presumptively unlawful. However, the employer may rebut the presumption by proving that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule.
See Stericycle, Inc., 372 NLRB No. 113 (2023); NLRB Office of Public Affairs, Board Adopts New Standard for Assessing Lawfulness of Work Rules (Aug. 2, 2023).