As expected, on May 24, 2023, Governor Tim Walz signed a new law banning noncompete agreements in Minnesota. The ban will be effective for such agreements entered on or after July 1, 2023.
By enacting the Omnibus Jobs, Economic Development, Labor and Industry appropriations bill (MN SF 30035), Minnesota becomes only the fourth state (along with California, Oklahoma and North Dakota) to ban noncompetes.
A Ruling and Order issued on April 28, 2023 by the U.S. District Court for the District of Connecticut in United States v. Patel, et al. ran the government’s losing streak to four failed trials seeking to criminally prosecute alleged wage-fixing and no-poach agreements.
To review, in 2016 the Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) issued Antitrust Guidance for Human Resources Professionals that warned of potential criminal prosecution for so-called “naked” no-poach agreements, i.e., agreements among competing businesses to restrict hiring or compensation of employees, untethered to any legitimate collaborative relationship.
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:
Thomson Reuters Practical Law has released the 2022 update to “Non-Compete Laws: Illinois,” a Q&A guide to non-compete agreements between employers and employees for private employers in Illinois, co-authored by our colleagues Peter Steinmeyer and David Clark, Members of the Firm in the Employment, Labor & Workforce Management practice.
Continue Reading Illinois Non-Compete Laws: Q&A for Employers, 2022 Update
Thomson Reuters Practical Law has released the 2022 update to “Non-Compete Laws: Massachusetts,” a Q&A guide to non-compete agreements between employers and employees for private employers in Massachusetts, authored by our colleagues David J. Clark and Erik Weibust, attorneys at Epstein Becker Green.
Continue Reading Massachusetts Non-Compete Laws: 2022 Update
Thomson Reuters Practical Law has released the 2022 update to “Trade Secret Laws: Illinois,” a Q&A guide to state law on trade secrets and confidentiality for private employers, authored by our colleagues Peter Steinmeyer and David Clark at Epstein Becker Green.
Continue Reading Illinois Trade Secret Laws: 2022 Q&A Guide for Employers
On May 2, 2022, a bill “limiting certain provisions in restrictive covenants” was introduced in the New Jersey State Assembly. In recent years, similar bills have been proposed in various state legislatures. Some such bills, after much lobbying, haggling and revisions, have even been enacted into law, including, for example, in Massachusetts, Illinois and Washington.
Continue Reading Proposed New Jersey Non-Compete Law Aims to Provide a Little Bit of Everything
The Wyoming Supreme Court recently made an important change to the way restrictive covenant agreements are evaluated by courts in that state. For many years, courts in Wyoming – as in many other states – have followed the so-called “blue pencil” rule when presented with a non-competition or non-solicitation agreement whose restrictions appear to be unreasonable.
Continue Reading Non-Competes: No More Blue Penciling in Wyoming
Employers, take note: certain amendments strengthening Oregon’s existing statutory restrictions on non-compete agreements, went into effect on January 1, 2022 – as previewed in our previous blog post. Coupled with existing limitations in ORS 653.295, the newly-effective amendments mean that a non-compete entered into with an Oregon employee after January 1, 2022 will be “void” ab initio if:
Continue Reading Friendly Reminder: New Limitations on Non-Competes in Oregon Are Now in Effect
Colorado statutory law has traditionally limited enforcement of restrictive covenants. C.R.S. § 8-2-113, entitled “Unlawful to intimidate worker – agreement not to compete,” provides that all contractual restrictions on a person’s post-employment competitive activity are “void” unless they fit into one of four categories: (1) contracts for the purchase and sale of a business or the assets of a business; (2) contracts for the protection of trade secrets; (3) contracts providing for recovery of expenses of educating and training an employee who have served an employer less than two years; and (4) agreements with executives, management personnel, and their professional staff. This statute applies not only to non-compete agreements, but also to agreements not to solicit customers or employees. Most companies trying to defend their restrictive covenants do so under the exception to protect trade secrets or the exception for executives/managers/professional staff.
Continue Reading Small Change in Colorado Law Could Have Large Effect: Criminalizing Restrictive Covenants