Non-Compete Agreements

Subscribe to Non-Compete Agreements

Effective January 1, 2022, the earning thresholds for employees and independent contractors in Washington who properly may be subject to noncompetition covenants will increase. The new adjusted earning threshold for employees will be $107,301.04 and the new adjusted earning threshold for independent contractors will be $268,252.59. Earnings is defined as the compensation reflected on box one of the form W-2 for employees or the payments reported on a form 1099 for independent contractors. Therefore, workers who earn amounts less than the new thresholds may not be subject to noncompetition covenants.
…
Continue Reading Washington State Raises Earning Thresholds for Workers Subject to Noncompetition Covenants

Our colleagues Nathaniel Glasser, Brian Steinbach, Maxine Adams, and Eric Emanuelson Jr. of Epstein Becker Green have a new post on Workforce Bulletin that will be of interest to our readers: “Washington, D.C. Postpones Ban on Non-Competes.”

The following is an excerpt:

Washington, D.C. employers have more time to get their non-compete ducks in a row. On August 23, 2021, Mayor Bowser signed the Fiscal Year 2022 Budget Support Act of 2021 (B24-0373) (the “Support Act”), which includes various statutory changes necessary to implement the D.C. FY 2022 budget. As expected, the Support Act postpones…

Continue Reading Washington, D.C. Postpones Ban on Non-Competes

As featured in #WorkforceWednesday:  This week, we look at the restriction and legislation of non-compete agreements.

The Future of Non-Compete Agreements

The restriction and legislation of non-compete agreements is gaining traction around the country, with states and the federal government passing or proposing new restrictions on the clauses. In July, President Biden signed an executive order that discussed the regulation of non-compete agreements, which in the past has only been the province of the states. Attorneys Pete Steinmeyer and Brian Spang discuss how the executive order impacts employers, changes to expect, and how to best prepare for the future.
Continue Reading The Future of Non-Compete Agreements – Employment Law This Week Video

On July 9, 2021, President Biden signed the Executive Order on Promoting Competition in the American Economy, which encourages the Federal Trade Commission (“FTC”) to employ its statutory rulemaking authority “to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.”  Executive Order, Section 5(g).  While the language in the Executive Order refers to the “unfair” use of non-compete clauses, the Administration’s explanatory statement makes clear that “the President encourages the FTC to ban or limit non-compete agreements” altogether.

A comprehensive rule governing non-competes would be an unprecedented move by…
Continue Reading Biden Issues Executive Order Encouraging Federal Action to Limit or Ban Non-Compete Agreements

In January of this year, our colleagues Janene Marasciullo and David Clark wrote about federal criminal indictments issued for naked wage-fixing and no-poach agreements. They warned that these federal indictments should serve as a cautionary tale for HR and other company executives. The Illinois Attorney General’s office recently reinforced that warning at the state level.

An Illinois court recently denied a motion to dismiss an action by the Illinois Attorney General’s Office–Antitrust Unit against a manufacturing company and three staffing agencies alleging that the company helped the staffing agencies enter into “unlawful agreements…to refuse to solicit or hire each other’s…
Continue Reading Illinois Attorney General’s Office on the Lookout for Unlawful No-Poach Agreements

Governor Steve Sisolak recently signed Assembly Bill 47, which amends Nevada’s statute governing noncompetition agreements (Nevada Revised Statutes 613.195).  Employers should be aware of the following changes to the law, which will go into effect on October 1, 2021.

First, under the amended Nevada statute, employers are explicitly prohibited from bringing an action to restrict a former employee from providing service to a former customer or client if:

  1. the former employee did not solicit the former customer or client;
  2. the customer or client voluntarily chose to leave and seek services from the former employee; and
  3. the former employee

…
Continue Reading Nevada Amends Law Regulating Noncompetition Covenants

We’d like to share an article we wrote recently in Law360: “Illinois Noncompete Reform Balances Employee and Biz Interests.”

Following is an excerpt (see below to download the full version in PDF format):

Over Memorial Day weekend, the Illinois Legislature accomplished something truly remarkable: a comprehensive reform of noncompete and nonsolicit law that was passed unanimously by the Illinois Senate and House of Representatives.

The reform bill is not a complete ban, as some competing bills and employee advocates originally sought. And the bill is certainly not pro-enforcement, as many employers would prefer. Instead, it is that increasingly rare political…

Continue Reading A Comprehensive Reform of Noncompete and Nonsolicit Law in Illinois

Oregon’s Senate Bill 169, signed May 21, 2021 strengthens Oregon’s existing restrictions on noncompete agreements.  Unlike Oregon’s 2019 law which imposed new notice requirements on employers seeking to enter into enforceable noncompetes, Senate Bill 169’s changes are more subtle though just as impactful.

Previously, noncompete agreements which failed to comply with Oregon’s statutory requirements were “voidable.”  Senate Bill 169 declares noncompliant noncompetes entered into after January 1, 2022 “void” ab initio.  This seemingly minor change may carry significant legal consequence if it ends up reducing the circumstances in which a former employer can sue for tortious interference.

Other…
Continue Reading Oregon Law Refines Restrictions on Noncompete Agreements

As reported here and here, in December 2019 and January 2020, the United States Department of Justice brought its first criminal charges against employers who entered into “naked” wage fixing agreements and no-poach (e.g., non-solicitation and/or non-hire)  agreements with competitors. According to DOJ’s 2016 Antitrust Guidance for HR Professionals, such agreements are “naked,” and, therefore, illegal per se, because they are “separate from or not reasonably related to a larger legitimate collaboration between competitors.”  Although DOJ recognized that such agreements may not be illegal per se when made in furtherance of legitimate joint…
Continue Reading The Pennsylvania Supreme Court Nixes a No-Poach Agreement Between Business Partners as Overbroad

New Jersey may be poised to become the latest state to adopt strict procedural and substantive requirements on post-employment non-compete agreements. Assembly Bill No. 1650, if passed, would substantially overhaul New Jersey’s laws regarding post-employment non-compete agreements by, among other things, limiting the types of employees against whom a non-compete agreement is enforceable, as well as limiting the time, scope and geographic region of a non-compete agreement. Assembly Bill No. 1650 still permits post-employment non-compete agreements so long as the agreements are “not broader than necessary to protect the legitimate business interests of the employer.” The bill suggests that…
Continue Reading New Jersey Legislature Considering Strict Procedural and Substantive Requirements for Post-Employment Non-Compete Agreements