Trade Secrets & Employee Mobility

We recently reported on the Federal Trade Commission’s (FTC) 3-2 vote to issue its final noncompete rule that, unless it is enjoined, would ban all new noncompetes and a majority of existing noncompetes (the Noncompete Rule).  As expected, within hours of the FTC’s vote on the final noncompete rule, Ryan, LLC, a leading global tax services and software provider, filed a lawsuit challenging the Noncompete Rule, and shortly thereafter the Chamber of Commerce of the United States of America (the U.S. Chamber) followed suit, filing its own lawsuit seeking to vacate and set aside the ...

As expected, the Federal Trade Commission (FTC) voted 3-2 yesterday to issue its final noncompete rule, with only a few changes from the proposed rule that are discussed below. Unless it is enjoined, which we expect, the rule will become effective 120 days after publication of the final version in the Federal Register.

If the final rule survives the legal challenges, which are likely to make it all the way to the United States Supreme Court, all new non-competes would be banned. Except for existing non-competes for senior executives (as defined below), all existing noncompetes with ...

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law: Health care employers face unique challenges and considerations when deciding whether to litigate non-compete agreements with physicians. However, in such a quickly evolving legal landscape, the decision to take the matter to court is not always clear.

In this episode of Spilling Secrets, Epstein Becker Green attorneys Katherine G. Rigby, Erik W. Weibust, Daniel L. Fahey, and Jill K. Bigler discuss the unique challenges involved in litigating physician non-competes.

[Update: On April 23, 2024, the Federal Trade Commission voted 3-2 to issue its final noncompete rule, with only a few changes from the proposed rule. Analysis of the final rule, the changes, and what may come next are discussed in this blog post.]

On April 16, 2024, the FTC announced that it will hold a special Open Commission Meeting on April 23, 2024 to vote on its proposed rule to ban the use of non-compete clauses in employment contracts, which has been pending since January 2023.  

As we reported then, the proposed rule, as drafted, would prohibit employers throughout the United States ...

On March 29, 2024, Maine Governor Janet T. Mills vetoed a bill that would have banned all employee noncompete agreements in the State of Maine.  Both chambers of the Maine legislature passed L.D. 1496, An Act to Prohibit Noncompete Clauses, that if enacted, would have banned employers from entering into noncompete clauses with employees and would have permitted noncompete agreements in Maine in only three limited circumstances: (i) the sale of a business; (ii) a shareholder in a limited liability company who sells or disposes all of the shareholders shares; or (iii) member of a ...

Ohio has long recognized the enforceability of non-compete agreements. Broadly speaking, a court can do one of three things with an unenforceable non-compete agreement: (1) the court can apply the “red pencil” doctrine and invalidate the entire agreement; (2) the court can apply the “blue pencil” doctrine and strike the unenforceable provisions; or (3) the court can modify the non-compete agreement to make it enforceable.

In 1975, the Ohio Supreme Court adopted a rule of “reasonableness” when determining whether to enforce a non-compete agreement, holding in ...

Washington State is making a few important amendments to its existing noncompete statute.  The amendments go into effect on June 6, 2024.

Back on January 1, 2020, Washington state enacted a noncompete statute that set limits on the use of noncompetition agreements, including the following:

• Non-competition provisions for workers who earn less than certain annual thresholds: (currently $120,559.99 for employees and $301,399.98 for independent contractors) are unenforceable.
• Non-competes exceeding 18 months are unenforceable.
• Excluded from the definition of ...

Now on Spilling Secrets, our podcast series on the future of non-compete and trade secrets law:

As college basketball madness sweeps across the nation this March, we’re seizing the opportunity to explore the intriguing intersection of trade secrets law and the sports world.

In this episode of Spilling Secrets, Epstein Becker Green attorneys Peter A. Steinmeyer, James P. Flynn, Daniel R. Levy, and Susan Gross Sholinsky appeal to both sports fans and lawyers alike to examine the strategic use of non-compete agreements across various sports. From scrutinizing non-competes in football and dissecting no-poaching arrangements in golf to unraveling compelling trade secrets in boxing, the team embarks on an examination of the legal dynamics shaping competitive sports.

On January 1, 2022, amendments to the Illinois Freedom to Work Act, 820 ILCS 90/1, et seq. (the “Act”), became effective, trumpeting reforms and limitations on an employer’s ability to enter into covenants not to compete and covenants not to solicit with certain categories of employees whose actual or expected annualized rate of earnings fall below certain thresholds.

Now, just two short years later, the Illinois state legislature has introduced four different bills containing proposed amendments to the Act that would undermine, if not completely obliterate, the Act’s ...

Last summer, the New York State legislature made waves when it passed a bill that effectively would have banned noncompete agreements.  New York’s Governor vetoed that bill in late December 2023.  This year, however, it is expected that the legislature will consider, and maybe pass, a less draconian bill that the Governor may be more likely sign.  Instead of an outright ban, such a bill might limit the use of noncompetes by, for example, prohibiting noncompetes only for certain types of employees, such as low wage earners.

While the business and legal communities await the state ...