Pending legislation in New York (Senate Bill S3100A/Assembly Bill A1278B) will result in the sharp curtailment of post-employment non-competes if passed into law. This development is concerning to many employers operating in New York or employing individuals currently living there, but for the moment, it is far from clear whether the current (or any) form of the bill may be passed into law.Continue Reading New York May Become Hostile Territory in Shifting Non-Compete Landscape
This year has seen an increase in state legislation addressing noncompetition agreements (“non-competes”). Following Washington, D.C.’s passage of a ban on non-competes in January 2021, Oregon, Nevada, and Illinois undertook revisions to their respective non-compete statutes.
Continue Reading 2021 Mid-Year State Non-Compete Legislative Update
Last month, Washington, D.C. Mayor Muriel Bowser signed the Ban On Non-Compete Agreements Amendment Act of 2020, which becomes effective next week. This law is a statutory ban on non-compete agreements that has the strength of similar bans in California, North Dakota, and Oklahoma.
Continue Reading Washington, D.C. Passes One of the Most Robust Prohibitions on Non-Competes in the Country
California is well known for its broad restrictions relating to non-competition clauses applicable to workers. After a recent decision by the Federal Circuit, such notoriety may extend to the patent realm. Employers should beware to not fall into this employment agreement trap.
Continue Reading Employment Law and Patent Law Collide: Federal Circuit Rules that California’s Non-Compete Restrictions Also Limit the Scope of Patent and Invention Assignment Clauses
Restrictive covenants and non-compete agreements are increasingly under attack, this time by the Federal Trade Commission (FTC). Companies rely on these restrictions to protect investment in intellectual property, technology and employees. On January 9, the FTC suggested that employee freedom of mobility trumps all of these legitimate business reasons companies use restrictive covenants and non-compete agreements.
Continue Reading FTC Commissioners Advocate Restrictions on Non-Compete Agreements; Seek Comments on Potential Rulemaking
Two years after jointly issuing its 2016 Antitrust Guidance for Human Resource Professionals with the FTC, the DOJ is now taking active steps to clarify its stance on no-poaching agreements. On January 25, 2019, the DOJ filed a Notice of Intent to File a Statement of Interest in three different class action lawsuits brought by employees of fast-food franchises against their employers alleging that no-poaching agreements in franchise agreements violate antitrust law.
Continue Reading No-Poaching Agreements May Not Be Entirely Out of the Question
When negotiating a settlement agreement in an employment dispute, “no rehire” language is often a standard term. This language typically bars the litigating employee from seeking re-employment with the former employer. However, in California, at least one “no rehire” provision was invalidated because it was not narrowly tailored to the employer at issue.
Continue Reading “No Rehire” Language in Settlement Agreement Found Unlawful Where Not Narrowly Tailored
After nearly a decade of attempts, the Democratic Party is once again attacking non-compete agreements at the national level. For several years, federal legislation has been proposed to limit the use of non-compete agreements in low-wage fields where Democrats say they have no valid use.
Continue Reading New Attack on Non-Competes
In December 2014, the New York Attorney General’s Office initiated an investigation into Jimmy John’s corporate office and its New York franchises. Jimmy John’s is a sandwich shop with franchises throughout New York and the United States. The investigation in New York concerned whether the use of a non-compete clause that barred departing employees from taking a job with any employer within two miles of a Jimmy John’s store that made more than 10 percent of its revenue from sandwiches was legal.
Continue Reading Jimmy John’s Will Stop Using Non-Compete Agreements in New York
Yesterday, John Smith, the president of ABC Bank, announced to the board of directors that he intended to resign to go work for XYZ Bank, a local competitor. Smith also intends to take some of the bank’s most important customers, and several top officers with him to XYZ Bank. Upset and panicked, the chair of the board contacted the bank’s employment attorney to determine what could be done to stop the president from leaving and taking customers and employees with him. “Send me a copy of John’s employment agreement,” the lawyer said. “Employment agreement? The board did not think John needed one. We never imagined he would quit.”
Continue Reading Why Not Having an Employment Contract With Bank Officers Will Hurt You