Non-compete law in Hawaii

Exceptions and special rules

• Sale of a business: the statute allows a non-compete given by a seller.
• Seller of a business may agree not to compete within a reasonable area and period in connection with the sale, if ancillary to a legitimate purpose and not substantially lessening competition (HRS § 480-4(c)(1)).
• Seller of a business: covenant not to compete within a reasonable area and period in connection with the sale (§ 480-4(c)(1))
• Partners: covenant not to compete with the partnership within a reasonable area and period on a partner's withdrawal (§ 480-4(c)(2))
• Employee or agent: covenant not to use the employer's trade secrets in competition, during or after employment, for a time reasonably necessary to protect the employer and without undue hardship (§ 480-4(c)(4)); this is the only exception to the technology-business ban
• Subsection (c) covenants are lawful only if ancillary to a legitimate purpose and not substantially lessening competition or tending to create a monopoly (§ 480-4(c))
• Employee of a 'technology business'. It is prohibited to include a non-compete clause or a non-solicit clause in an employment contract relating to an employee of a technology business; such a clause is void and of no force and effect. 'Non-compete clause' = prohibits working in a specific geographic area for a specific period after leaving the employer. 'Non-solicit clause' = prohibits soliciting employees of the employer after leaving. 'Technology business' = a trade or business deriving the majority of its gross income from the sale or license of products or services resulting from its software development or information technology development (design, integration, deployment or support services for software), excluding businesses considered by standard practice part of the broadcast industry and telecommunications carriers (HRS § 269-1) holding a franchise or charter. (HRS § 480-4(d) (as reproduced in S.B. 1161 (2025), s. 2))

Non-solicitation clauses

For technology-business employees, a non-solicit clause barring solicitation of the employer's employees is void (§ 480-4(d)); customer non-solicitation is not covered by that definition. For others, no statute; § 480-4(a)/(c) and case law apply.

Remedies

A prohibited technology-business clause is void and of no force and effect (HRS § 480-4(d)). In a civil action interpreting or enforcing an agreement restricting an employee from competing, a prevailing employee or former employee is awarded reasonable attorneys' fees and costs (HRS § 607-14.9, text read only from a 2015 copy of the official page). Chapter 480 antitrust remedies were not reviewed.

Recent changes

• 2025-01-17. S.B. 1161 (2025) introduced to extend the ban and non-solicit ban to restaurant and retail employees, retroactive to 2015-07-01; referred to LBT/CPN and JDC; carried over to the 2026 session on 2025-12-08; no later action shown in the Legislature's status page as captured 2026-08-08. Not enacted. Source
• 2015-07-01. Act 158, Session Laws of Hawaii 2015, banned non-compete clauses for technology-industry workers (per the Legislature's S.B. 1161 (2025) findings, which also use 7/1/2015 as the retroactive date; the Act itself was not fetched). Source