Trade Secrets & Employee Mobility

As featured in #WorkforceWednesday®: This week, we’re examining the repercussions for employers of a recent court decision that set aside the Federal Trade Commission’s (FTC’s) nationwide non-compete ban:

On August 20, 2024, the U.S. District Court for the Northern District of Texas blocked the FTC’s ban on non-compete agreements nationwide. What does this mean for employers?

Epstein Becker Green attorney Peter A. Steinmeyer tells us what employers should be doing now and outlines the implications of this decision on existing and future non-compete agreements.

On July 17, 2024, Governor Josh Shapiro approved Pennsylvania’s first statute imposing limitations on the use of noncompetes in the state. The Fair Contracting for Health Care Practitioners Act (the “Act”) prohibits the enforcement of certain noncompete covenants entered into by health care practitioners and employers. Here are the key points of the Act:

• The Act’s effective date is January 1, 2025.
• Subject to certain exceptions, a “noncompete covenant” entered into after January 1, 2025 is “deemed contrary to the public policy and is void and unenforceable by an employer.”
• A “noncompete covenant” is defined as an “agreement that is entered into between an employer and a health care practitioner in this Commonwealth which has the effect of impeding the ability of the health care practitioner to continue treating patients or accepting new patients, either practicing independently or in the employment of a competing employer after the term of employment.”

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 ...

2023 started off with a bang, and it is certainly not ending with a whimper. On January 4, 2023, the Federal Trade Commission (FTC) announced the settlement of two enforcement actions against employers arising out of their use and enforcement of noncompetes. The very next day, the FTC proposed a rule that would ban noncompetes nationwide if enacted (which we do not believe will ever happen), with only a very narrow exception for noncompetes entered into in connection with the sale of a business.

The year only continued to get more turbulent in this area of law, with Minnesota banning ...

As featured in #WorkforceWednesday:  New York State’s noncompete ban has passed both houses of the state legislature and now awaits Governor Kathy Hochul’s signature.

Epstein Becker Green attorney David J. Clark details how this proposed ban would affect employers and reveals how noncompete bans have become a growing trend throughout the country.

The Federal Trade Commission (FTC) has announced that it will be hosting a public forum on February 16, 2022, from 12:00-3:00 p.m. ET, to discuss its proposed nationwide noncompete ban. The forum is intended to supplement the FTC’s request for written comments, which as of today have exceeded 10,000. According to the FTC, “[t]he commission will hear from a series of speakers who have been subjected to noncompete restrictions, as well as business owners who have experience with noncompetes.” It is unclear whether any of the “business owners who have experience with ...

As we predicted, earlier today, 100 industry organizations submitted a request to the Federal Trade Commission (FTC) to extend the comment period for its proposed rule banning noncompetes nationwide by an additional 60 days. According to the letter, “[t]he regulated community should be given sufficient time to assess the potential consequences of the rulemaking and develop insightful comments for the Commission to consider.” The letter further states: