Gov. Tim Walz has signed or is expected to sign the Minnesota legislature’s Jobs and Economic Development and Labor Omnibus Budget Bill, bringing broad change to the Minnesota employment law landscape. Notably, the new law bans post-employment noncompete agreements in Minnesota, creates state-wide paid sick and safe time leave, prohibits restrictive franchise agreements, modifies wage disclosure protection law, provides additional protections for pregnant and nursing workers, prevents mandatory employer-sponsored meetings, and creates additional paystub requirements for construction workers, among other things. Gov. Walz signed the paid family and medical leave law, creating a new paid family and medical leave program funded by employer and employee payroll taxes and providing up to 12 weeks of paid leave in a single benefit year for an employee’s own serious health condition and up to 12 weeks of paid leave in a single benefit year for bonding, safety leave or family care, with a cap of no more than 20 weeks of total combined leave in any single benefit year. The Minnesota legislature also ended its 2023 session after passing a recreational cannabis law, amending the state’s drug and alcohol testing laws following the legalization of recreational marijuana, which is anticipated to be signed into law by Gov. Walz this week.
Tag: Non-Competes / Trade Secrets
Non-Competes Will Continue to Be Under Attack in 2023
The U.S. Federal Trade Commission (FTC) recently issued a notice of proposed rulemaking that would dramatically change the playing field for employers who have post-employment non-compete agreements with employees or have a practice of requiring such agreements as a condition of employment. The FTC’s proposed rule is open for public comment until March 20, 2023. Whether the FTC’s proposed rule (once finalized) will survive legal challenges is a hotly debated topic among members of the legal community, many of whom believe that Congress did not clearly empower the FTC with the authority to enact such a broad rule, and therefore the rule will not survive given the U.S. Supreme Court’s 2022 decision in West Virginia v. EPA.
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FTC Seeks Feedback on Proposed Rule on Use of Non-Competition Agreements
The Federal Trade Commission announced that it will hold a virtual public forum on Thursday, February 16, 2023, to address its proposed rule on the use of non-competition agreements, as well as certain non-solicitation and non-disclosure agreements. The purpose of this forum is to examine the proposed rule and provide an avenue for individuals, including both employees and employers, to voice their opinions and discuss their experiences with non-compete agreements.
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FTC’s Proposed Rule Banning Employment-Based Non-competes
The Federal Trade Commission announced a proposed rule that would, if adopted, ban the use of employment-based non-competes and require employers to rescind existing non-competes. The FTC’s proposed rule would reshape large segments of the American economy and supplant numerous recently enacted state statutes restricting the permissible use of non-competes and other restrictive covenants. If the proposed rule becomes effective, employers will need to consider alternatives to protect customer and employee relationships, and confidential information.
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Top Noncompete Developments of 2022
2022 was a relatively quiet year in terms of noncompete developments. However, both state legislatures and courts continued to take steps to narrow the circumstances under which noncompetition and employee non-solicitation agreements may be enforced. As such, employers remain well advised to continue to: (1) be selective in identifying those categories of employees required to sign noncompete agreements; (2) rely on choice of law and venue provisions as allowed to maximize the chances of enforceability; (3) keep a keen eye on statutory developments; and (4) avoid no-poach agreements with other employers.
The Fate of Non-Compete Agreements in New Jersey Remains Unknown
New Jersey may become the latest state to join the growing trend of states enacting legislation to limit the use of common restrictive covenants, such as non-compete and non-solicitation agreements. In May of 2022, Assembly Bill 3715 (“A3715”) was introduced in the New Jersey legislature which, if passed, would significantly impact employers’ ability to enforce non-compete agreements and impose significant obligations aimed at deterring employers from entering into such agreements.
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