Non-Solicit Agreements

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

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

As readers of this blog know, no-poach and wage-fixing agreements are a current hot topic for both civil and criminal enforcement by the Antitrust Division of the Department of Justice.

Our colleague, Stuart M. Gerson has authored a helpful summary of recent history and what’s at stake regarding this topic, in an article published in Bloomberg Law: “No-Poaching Agreements, Wage-Fixing & Antitrust Prosecution.”

The following is an excerpt:

Especially in difficult economic times, companies look for stability and predictability. Hence, while intent upon avoiding litigation charging wage fixing or its close cousin, no-poach agreements, experience suggests that there are


Continue Reading No-Poaching Agreements and Wage Fixing: The Antitrust Prosecution Risks

Last week, the New York State Senate advanced two bills seeking to ban both “no-poach” clauses in franchise agreements and “no-rehire” clauses, which are commonly used in settlement agreements.

The first of these bills, known as the End Employer Collusion Act (Bill S562), prohibits no-poach agreements between franchisors and franchisees.  Such agreements restrict franchisees from soliciting or hiring current or former employees of the franchisor or other franchisees.  The End Employer Collusion Act would also provide a private right of action for any person denied employment on account of a no–poach agreement, and would allow for the recovery
Continue Reading New York State Legislature Aims to Prohibit Use of No-Poach and No-Rehire Clauses

When Massachusetts enacted the Massachusetts Noncompetition Agreement Act (“MNCA”) in mid-2018, some commentators suggested that the statute reflected an anti-employer tilt in public policy. But, we advised  that sophisticated employers advised by knowledgeable counsel could navigate the restrictions set forth in the MNCA.  As reported here, the May 2019 decision from the District of Massachusetts in Nuvasive Inc. v. Day and Richard, 19-cv-10800 (D. Mass. May 29, 2019) (Nuvasive I) supported our initial reading of the MNCA.   The First Circuit’s April 8, 2020 decision in Nuvasive, Inc. v. Day, No. 19-1611 (1st Cir. April 8,
Continue Reading First Circuit: Massachusetts Employee Must Abide by a Restrictive Covenant Governed by a Delaware Choice of Law Clause – the More Things Change, the More They Stay the Same, Part II

We encourage our readers to visit Workforce Bulletin, the newest blog from our colleagues at Epstein Becker Green (EBG).

Workforce Bulletin will feature a range of cutting-edge issues—such as sexual harassment, diversity and inclusion, pay equity, artificial intelligence in the workplace, cybersecurity, and the impact of the coronavirus outbreak on human resources—that are of concern to employers across all industries. EBG’s full announcement is here.

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(And if you haven’t subscribed to our blog yet, please do so in the right-hand margin or bottom of this page.
Continue Reading Workforce Bulletin: Insights on Labor and Employment Law – a New Blog from Epstein Becker Green

A recent decision in Edward D. Jones & Co., LP v. John Kerr (S.D.In. 19-cv-03810 Nov. 14, 2019), illustrates the unique challenges that broker-dealers may face when enforcing post-employment covenants that prohibit former registered representatives (“RRs”) from soliciting clients. Edward Jones sued Kerr, a former RR, to enforce an employment contract that required him to return confidential information upon termination and prohibited him from “directly or indirectly” soliciting any Edward Jones’ client for a period of one year.  Although Kerr did not challenge the validity of the confidentiality and non-solicitation provisions, the court denied Edward Jones’ request for a temporary
Continue Reading Enforcing Non-Solicitation Agreements Against Financial Professionals: A Court Finds Financial Professionals Have a Duty to Notify Clients About a Change of Employment

A recently passed Florida law, Florida Statutes 542.336 seeks to prevent medical providers from using restrictive covenants to monopolize medical specialties in rural counties.  The law bars the enforcement of “restrictive covenants” against physicians who practice “a medical specialty in a county wherein one entity employs or contracts with, either directly or through related or affiliated entities, all physicians who practice such specialty in that county.”  Once a second provider enters the market for a particular specialty in a county, restrictive covenants remain unenforceable in that county for a period of three years.

Although the purpose of the law is
Continue Reading Florida Law Limits Physician Restrictive Covenants in Rural Counties

Our colleagues at Epstein Becker Green have a post on the Financial Services Employment Law blog that will be of interest to our readers: “FINRA Issues New Guidance to Member Firms Regarding Customer Communications When Registered Representatives Depart.”

Following is an excerpt:

On April 5, 2019, FINRA published Regulatory Notice 19-10 (the “Notice”) addressing the responsibilities of member firms when communicating with customers about departing registered representatives.  As the Notice indicates, in the event a registered representative leaves a member firm, FINRA aims to avoid any disruption in the service of


Continue Reading New Guidance Issued by FINRA to to Member Firms

As we’ve discussed, the California Court of Appeal in AMN Healthcare, Inc. v. Aya Healthcare Services, Inc., recently ruled that a broadly worded contractual clause that prohibited solicitation of employees for one year after employment was an illegal restraint on trade under California law.

Now, a second court has joined in.

 In Barker v. Insight Global LLC, Case No. 16-cv-07186 (N.D. Cal., Jan. 11, 2019), Judge Freeman, sitting in the Northern District of California, adopted AMN’s reasoning and reversed a prior order that dismissed claims that asserted a contractual employee non-solicitation provision was unlawful.

In doing so,
Continue Reading Second Court Calls into Question Viability of Employee Non-Solicitation Agreements