In the words of Heraclitis, “there is nothing permanent except change,” and we have certainly had a lot of changes in non-compete laws around the country in the last few years. Since the White House issued a call to action to state legislators asking them to reign in the use of non-compete agreements in 2016, 16 states proceeded to amend their non-compete statutes to add additional protections for employees.
*This graphic was created by Elena Dolgikh, my brilliant scientist sister.
Employers in any of the following states who have not updated their employment agreements and employee exit and on-boarding procedures in the last four years, are running the risk that their non-compete and non-solicitation restraints will not be enforceable when the time comes to enforce them:
- New Hampshire
- New Mexico
- Rhode Island
In addition to the individual states taking action, there have been several attempts to pass a federal statute that, in one form or another, would restrict non-compete agreements only to higher-earning employees. While those attempts have failed, earlier this year, the Federal Trade Commission held a public workshop dedicated to the discussion of whether it should use its rule-making authority to issue nationwide restrictions on the use of non-compete agreements. The decision from the FTC is expected later this year.
You can read more about the development of non-compete movement here here. Such movement is expected to continue this year, fueled in part, by the rising unemployment rates, job scarcity, and economic downturn caused by the COVID-19 pandemic.
Leiza Dolghih is a labor and employment board certified partner at Lewis Brisbois Bisgaard & Smith LLP in Dallas, Texas and a Co-Chair of the firm’s Trade Secrets and Non-Compete Disputes national practice. Her practice includes commercial, intellectual property and employment litigation. You can contact her directly at Leiza.Dolghih@LewisBrisbois.com or (214) 722-7108.