Restrictive Covenants

As we previously reported, here, the Federal Trade Commission (FTC) voted to issue a final rule (the “Rule”) that would prevent most employers from enforcing noncompete agreements against workers, with only limited exceptions for existing noncompetes with senior executives and noncompetes made in connection with the bona fide sale of a business.… Continue Reading

On March 21, 2024, the Federal Deposit Insurance Corporation (“FDIC”) issued its proposed Statement of Policy on Bank Merger Transactions (the “Proposal”) for public comment. The Proposal seeks to update guidance, last amended in 2008, on how it will evaluate bank merger transactions with respect to competition, financial resources, the convenience and needs of communities, financial stability, and money laundering.… Continue Reading

In May 2022, Colorado legislators passed a law that bans employee non-compete clauses for workers making less than six figures annually.  Governor Jared Polis (D) signed the bill into law on June 8, 2022, giving it an effective date of August 10, 2022.

In short, HB 22-1317, imposes an income-based minimum on enforceable non-compete agreements between employers and employees. … Continue Reading

On July 9, 2021, the White House issued an executive order (“EO”) with the stated objective of countering anti-competitive forces throughout the economy.  One specific directive is the limitation of non-compete agreements, which include not only restrictive covenants, but also “other clauses or agreements that may unfairly limit worker mobility.”  Potentially, this could include customer and employee non-solicitation provisions, which some courts construe in the same manner as employee restrictive covenants. … Continue Reading

The latest episode of Business Better is a discussion of “no-poach” agreements – agreements between competitors that neither will hire the other’s employees. We’ll discuss the different types of such agreements, their enforceability under antitrust and other laws and the possibility of criminal prosecution arising from their use, and how to protect a business from poaching without running afoul of the law.… Continue Reading

Whether employee no-poach agreements are illegal per se is being tested in a criminal case, U.S. v. Surgical Care Affiliates LLC et al., drawing the attention of many interested parties, including the United States Chamber of Commerce (Chamber).

In 2016, the Federal Trade Commission (FTC) and the Department of Justice, Antitrust Division (DOJ or the Division) released joint guidance signaling that agreements between competing employers that “limit or fix the terms of employment” for prospective employees may violate antitrust laws. … Continue Reading

Last Thursday, Judge Anne Thompson found unconstitutional a portion of the New Jersey Law Against Discrimination (NJLAD). The ruling specifically addresses the provision in the NJLAD that was added in March 2019, discussed here, which, in effect, voided any employment contract that required an employee to waive his or her right to a jury and to arbitrate a claim of discrimination, retaliation or harassment.… Continue Reading

Labor and Employment partner David Fryman leads a conversation on employment restrictive covenants. Joining David are Juliana van Hoeven and Elliot Griffin, associates in the group. Together, David, Juli, and Elliot, review a number of important points regarding restrictive covenants: including the circumstances that make the use of restrictive covenants advisable or not, what’s required to make them enforceable and how that can vary from state to state, and the impact of the COVID-19 pandemic on enforcement.… Continue Reading