Employee Mobility and Restrictive Covenants

New Jersey Noncompete Ban Clears Major Legislative Hurdle

A New Jersey bill that would ban most worker noncompete restrictive covenants (A5708) cleared the Assembly Labor Committee on December 4, 2025, in a bipartisan 8-2 vote. On the same day, the bill was referred to the Assembly Regulated Professions Committee and may be headed to the Assembly floor before the Legislature adjourns on January 12, 2026. An identical companion bill in the New Jersey Senate (S4385) was introduced on May 19, 2025, but remains in the Senate Labor Committee.

After several years of similar proposed legislation dying in the Legislature, this bill’s momentum signals potential passage for several reasons: (1) Governor Murphy may want to end his term with this marquee employee-friendly legislation; (2) the Federal Trade Commission recently abandoned its federal noncompete ban, leaving states to take the lead on efforts to increase employee mobility; (3) the bill sponsor chairs the Assembly Labor Committee; and (4) the bill passed in committee with bipartisan support.

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Part 29 of “The Restricting Covenant Series”: From Reliable to Unpredictable: Navigating Post-Employment Restrictive Covenants in Delaware

Once considered a reliable “go-to” state for enforcing noncompetes and nonsolicitation agreements, Delaware is now a minefield of unpredictability. Historically, if a noncompete’s geographic, temporal or business activity scope was too broad, Delaware courts used the “blue-pencil” doctrine¹ to render them reasonable and enforceable. Those days are largely gone. Blue-penciling is not a reliable safety net for employers in the First State. Today, Delaware courts are more likely to strike overly broad restrictions than to rewrite them, exposing employers to competitive risks if their agreements are not precisely tailored or carefully crafted.

Something is Afoot in the First State

Delaware’s reputation as the jurisdiction of choice for business is rooted in its robust and employer-friendly corporate laws. It is a “contractarian state,” meaning its courts respect and enforce the bargains struck by parties – whether in employment, merger, stock or partnership agreements – so long as those bargains are not unconscionable or contrary to public policy. This contractarian philosophy has long offered businesses predictability and reliability, making Delaware a preferred state of incorporation.

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Florida’s CHOICE Act Takes Permitted Employer Protections to a New Level

Although Florida law has been considered noncompete friendly for some time, the CHOICE Act — which took effect July 3 — takes permitted employer protections to a new level, making lengthy garden leave and noncompete provisions per se permissible for individuals who earn more than a relatively modest threshold and have access to and work with confidential information. Florida employers thus should consider whether to take advantage of the new law with current or future employees and independent contractors to enhance protection of their confidential information and customer relationships.

To view the full alert, visit the Faegre Drinker website.

Supreme Court Decision in Trump v. CASA Does Not Affect Ryan Court’s Universal Injunction of the FTC Noncompete Rule

The Supreme Court has issued its decision in Trump v. CASA, ruling that district courts generally lack the authority to issue nationwide, universal injunctions.

For employers, a key question arises: What impact does the CASA decision have on the FTC’s final rule banning the use of most noncompete agreements, which was set aside in August 2024 by the Northern District of Texas in the Ryan decision?

To view the full alert, visit the Faegre Drinker website.

Four Trade Secret Developments to Follow in 2025

Significant developments are likely in 2025 in trade secret law, building on major cases and developments in 2024. We highlight four areas to watch: the extraterritorial reach of the Defend Trade Secrets Act, artificial intelligence, large damages awards and the impacts of a potential noncompete ban.

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Top 10 Noncompete Developments of 2024

Without a doubt, 2024 was a roller coaster of a year for employers in the area of noncompete law, from an FTC attempted nationwide ban on most noncompete agreements, to continued state law action seeking to narrow the use of noncompete provisions, to a growing number of court decisions revealing deep frustration by judges asked to enforce overbroad post-employment restrictions. Employers looking to protect confidential information and customer goodwill through the use of noncompetition or nonsolicitation provisions should stay abreast of state law developments and review existing agreements to ensure they are narrowly tailored to address judicially recognized protectable interests.

To view the full alert, visit the Faegre Drinker website.