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.

Continue reading “FTC’s Proposed Rule Banning Employment-Based Non-competes”

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.

Continue reading “Top Noncompete Developments of 2022”

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.

Continue reading “The Fate of Non-Compete Agreements in New Jersey Remains Unknown”

DC Finally Prunes its Ban on Non-Competes

When initially enacted in January 2021, the District of Columbia’s Ban on Non-Compete Agreements Amendment Act was one of the broadest non-compete prohibitions in the country.  Its effective date, however, was delayed on several occasions amid widespread criticism of its comprehensive scope.  For more information about the original act and its subsequent delay, please see our previous posts on the matter here and here.  The DC Council ultimately passed a scaled back version some 18 months later.

Effective October 1, 2022, the Non-Compete Clarification Amendment Act of 2022 (the “Amended Act”) limits the scope of the initial ban by narrowing of (a) the definition of a “non-compete provision” and (b) applicability to certain highly compensated employees (“HCEs”).

Continue reading “DC Finally Prunes its Ban on Non-Competes”

Coming August 2022: Colorado Substantially Limits Noncompete Agreements

Beginning August 10, 2022, Colorado will drastically narrow the circumstances in which Colorado employers can seek to enforce noncompete and other restrictive employment agreements. Despite Colorado law already having a general restriction against the use of noncompete agreements, the Colorado General Assembly recently passed, and Gov. Jared Polis has now signed, HB 22-1317. With this bill, Colorado joins the growing number of states enacting increased employee protections against restrictive covenant agreements, including banning such agreements with workers earning below a certain threshold.

Continue reading “Coming August 2022: Colorado Substantially Limits Noncompete Agreements”

U.K. Employment Law Update: Worker Status, Non-Compete Restrictions and COVID-19 Dismissal

Clarification on Worker Status

In Nursing and Midwifery Council v Somerville [2022] EWCA Civ 229, the Court of Appeal (CoA) considered whether an obligation on the part of a worker to perform a minimum amount of work was a prerequisite for worker status.

Continue reading “U.K. Employment Law Update: Worker Status, Non-Compete Restrictions and COVID-19 Dismissal”