Focus HR Inc.’s Post

It's a definite maybe. The ban on noncompete agreements is back on again...sort of. A Philadelphia federal judge ruled that FTC rule would be allowed to stand. The rule issued in April would essentially ban the use of such agreements and make existing ones unenforceable. But it's not over. A separate case in Texas is awaiting a decision, leaving employers in legal limbo. And that's not necessarily the end of it. Roughly 18 percent of the U.S. workforce, or 30 million people, are covered by noncompete agreements. The use of noncompetes is widespread and spans across industries from fast food workers to physical therapists to CEOs. In many cases, they really don't make much sense. And in some states such as California where noncompetes have been non-enforceable for years, they're often still included in the pile of HR paperwork workers must complete and sign the first day of work as a condition of employment. For employers, the argument for such agreements is they protect workers from taking proprietary and confidential information to a competitor. On the flip side, tens of millions of employees have been prevented from leaving to work for a competitor or start a competing business. In the broader sense, they've been used to prevent upward mobility. It likely won't be over for a while. Regardless of the decisions by either court, the reality is this will likely face a number of appeals all the way up to the Supreme Court. Unless they're based in states with specific bans and policies around noncompetes, employers will likely be in a legal gray area for a while longer https://lnkd.in/gU_PJjFt #noncompete #workers #workforce #talent #hiring #humanresources #legal

Last week I posted about various states that were/are in the process of banning non-compete agreements. A link to that post in the first comment below. In that post I said the following about Maine: “The proposed legislation aims to ban all employee non-competes with limited exceptions related to business transitions. Notably, the bill would invalidate out-of-state choice-of-law provisions and enforce workplace posters notifying employees of the ban. Having passed both House and Senate, it awaits the Governor’s signature.” Well, on March 29, 2024, Maine Governor Janet T. Mills vetoed the bill! 🤦🏻♂️ According to Governor Mills, noncompetes are valuable to protect an employer’s confidential information from disclosure to a commercial competitor. The Governor saud that the bill “ignores the fact that noncompete agreements can be critical tools to prevent employees from taking unfair advantage of their former employers.” The Governor said that it would be “unfair and contrary to public policy” to prohibit employers from restricting their employees from bringing such confidential information to a competitor. The Governor also referenced the fact that the state already has in place a law that “places strict limits on the use of noncompete agreements in Maine” and that there is “no evidence that the recently enacted statute is inadequate, or that noncompete agreements are being abused in Maine.” Finally, Governor Mills referenced the Federal Trade Commission (FTC), saying that it is expected to adopt new regulations governing the use of noncompete agreements. So, now for the bill to become law the Maine Legislature would have to override the Governor’s veto, which requires a two-thirds vote. Good luck on that. Bottom line, Maine does not join the list of states banning noncompete agreements. #law #hr

Federal and state governments continue to change laws on non-compete agreements rapidly. We're currently monitoring 88 non-compete bills that are pending in 33 states. We've created an interactive map to help you stay current with state-specific bans and regulations on non-compete agreements: https://lnkd.in/dA2SzdBK Make sure to check back for the latest updates! #noncompete #employmentlaw #hr #hrtech #legaltech

🚫 Say Goodbye to Non-Compete Agreements! 🚫 The FTC has officially implemented a ban on non-compete agreements (executives, this most likely does not include you)! 🎉 This groundbreaking decision is a game-changer for employees in all industries, granting them greater freedom and mobility in their careers. No more feeling trapped in a job due to restrictive clauses. No more hesitating to pursue exciting opportunities for fear of legal consequences. This ban empowers workers to explore new paths, innovate, and share their talents with various organizations without restraint. At its core, this move promotes fairness, competition, and entrepreneurship. It's a win-win for both employees and businesses, fostering healthy competition while unlocking the full potential of the workforce. Hopefully, this initiative will pave the way for improved workplace cultures, increased investment in employees, and equitable compensation. Loyalty cannot be taken for granted; it must be earned. Employers must rise to the occasion and enhance their offerings to attract and retain top talent. Let the competition for talent begin! #HRNews #NonCompetes

Litigation challenging the recent Federal Trade Commission’s (FTC’s) final rule banning non-compete agreements is still onging. Regardless of what happens, many states also are imposing limits on agreements. What steps should employers take to retain employees in the absence of a noncompete? This article discusses the issue - https://buff.ly/3zvyg0A You should also talk with an attorney about tailoring your noncompete or using other types of agreements to address concerns you may have about employees going to competitors. #employmentlaw #noncompete #employeeretention

More to come… Non-compete agreements continue to be a hot button issue. More importantly, the abuse of such agreements. This excerpt from Jonathan Pollard sums it up nicely for those interested. “Companies are abusing non-compete agreements. Non-compete agreements are not simple contracts. We cannot just say that someone violated a contract and must be punished. That’s wrong. These contracts are restraints of trade and companies are badly abusing them. We need to limit this. We need to rigorously scrutinize this. We cannot allow companies to abuse non-compete agreements, pay lip service to some supposedly legitimate business interest, and easily obtain an injunction that puts someone out of work. People should be free to earn a living unless it truly creates some dire harm or obvious unfairness. And just saying, “You signed a contract” does not prove any such harm or unfairness. The vast majority of employee non-compete agreements are completely unnecessary, improper, intended to restrict ordinary competition, and must be deemed illegal.” - Jonathan Pollard

On April 23, 2024, the Federal Trade Commission voted to issue a final rule prohibiting employers from using non-compete clauses as part of any agreement subject to a few narrowly tailored exceptions. The following article by A.Y. Strauss attorneys Ross Fox and Maria A.G. Harper, Esq. guides employers and employees through considerations for proactively responding to this historic change. Read more: https://lnkd.in/g9srtAER #NonCompetes #EmploymentContracts

This week, the FTC adopted its long-awaited non-compete rule, which is set to become effective 120 days after publication. If it goes into effect, the rule would prohibit the use of non-competes for most employees across the country. Here's a summary of the final rule and what is likely to come next: https://lnkd.in/gBqD7zMb

The FTC has issued a rule banning noncompete agreements. Noncompete agreements – also known as restrictive covenants – are contracts designed to prevent workers from leaving their current employer to work immediately for a competitor, usually by establishing a set amount of time that the employee must wait before beginning work for said competitor. See the GovDocs Blog below for more information on this ruling. #noncompete #employmentlaw #staycompliantpartneringwithgovdocs. GovDocs, Inc

Litigation challenging the recent Federal Trade Commission’s (FTC’s) final rule banning non-compete agreements is still onging. Regardless of what happens, many states also are imposing limits on agreements. What steps should employers take to retain employees in the absence of a noncompete? This article discusses the issue - https://buff.ly/3zvyg0A You should also talk with an attorney about tailoring your noncompete or using other types of agreements to address concerns you may have about employees going to competitors. #employmentlaw #noncompete #employeeretention