Category Archives: Noncompetes

While we’ve all turned our attention to the FTC’s proposed rule to ban noncompetes, the clock has been running on the public comment periods for the proposed consent orders in the three noncompete enforcement actions announced by the FTC at the beginning of the year. Today, the FTC has publicly released the final order in one of them. The others should be coming soon. And, as we said before, this is likely just the beginning. Make sure that you are not engaging in behavior that is likely to elicit another.
The day an employee shows up for their first day of work is often the day they learn that a noncompete is a requirement of the job. But, according to a 2015 study by Professors Evan Starr, J.J. Prescott, and Norm Bishara, providing advance notice that a noncompete will be required actually leads to 11% more training and 6.6% more job satisfaction. Eight states plus D.C. now have some requirements. Make sure you are complying.
Forty-seven state legislatures as well as Washington, D.C. – with the approval of Congress – have spent years honing their noncompete laws to fit their local communities and industries. In one fell swoop, three Commissioners at the FTC are proposing to undo all of it. With it, they will also eliminate the use of a broad swath of nondisclosure, nonsolicitation, no-service, no-recruit, and no-hire agreements. Companies have six things they need to do now.