Committee reviews S.230 changes to non-competes, inserts mediator post for state labor board

A legislative committee reviewed a revised draft of S.230 on workplace restrictive covenants and inserted language to authorize a mediator position at the Vermont Labor Relations Board, while flagging unresolved funding and drafting questions.

Sophie Zdatny of the Legislative Council told the committee she was presenting version 7.2 of S.230 and that the draft includes a new subsection 3C incorporating language from H.548 to allow the Labor Relations Board to "employ a mediator" as an administrative position; the draft does not include an appropriation. "This adds a new section 3C," Sophie said, adding the mediator "may provide free mediation services to public and private sector collective bargaining units and employers upon a request made during collective bargaining."

Why it matters: committee members said they hope a state-funded mediator would reduce hearings and delays at the Labor Relations Board by resolving disputes before they reach adjudication. One senior member summarized the bill's path to date: H.548 had originally included both a mediator and a staff attorney, but appropriations removed the attorney and later Senate Appropriations removed the mediator from the bigger appropriations bill, prompting the insertion into S.230 as a way to "stake the issue" ahead of conference negotiations between the chambers.

Committee members questioned the draft's wording and funding implications. A member asked whether the phrase "may employ" reflected a lack of funding; Sophie replied that "may" was retained because the position is unfunded in the current text and that funding would have to be worked out between the chambers. The same member noted committee testimony that outside mediators can be costly; Sophie and others said testimony cited rates "around $450 an hour."

The draft also revises how restrictive covenants would be handled. Sophie walked the committee through section 3B, which targets specific contract provisions rather than voiding entire agreements: the text would render non-compete clauses, provisions limiting a separated health-care provider's ability to give notice or to be solicited, certain non-solicitation restrictions, disparagement clauses, and clauses that require litigation outside Vermont to be unenforceable. "If you have an agreement that prevents a health care provider from making disparaging statements, that would then be stripped out," Sophie said, and she noted subdivision C streamlines the original language and subdivision D addresses choice-of-law issues.

Stakeholder response: Jessa Barnard of the Vermont Medical Society told the committee, "We are very supportive of this language," saying the changes and clarifications — including striking particular provisions rather than entire contracts — made sense and that the revised disparagement language answered a prior question. Laura Pelosi of MMR said she had "verified with Laura Cheever" that the 2022 interstate nurse licensure compact would not conflict with the bill's prohibitions, because the compact governs licensure rather than terms of employment.

Points of contention and unresolved items: committee members debated whether adding a staff attorney position — which had been proposed earlier and later stripped from appropriations — might better address backlog and staffing delays than a mediator alone. The committee also flagged drafting consistency: Sophie stated early in her presentation that "this does not relate to the health care providers at all," but she later walked through detailed changes in section 3B that explicitly address health-care-related restrictive covenants, a potential source of confusion the committee may need to resolve in later drafting.

Next steps: the chair said the draft before the committee was the current version and that the body was approaching a point where it could vote the bill out of committee, but no formal vote was recorded during the session. Funding for a mediator, and whether the board "may" or "shall" employ one once funded, remain to be worked out between appropriations committees and the full chambers.