Are non-compete agreements enforceable if the employee is terminated? The answer depends on which state the employee is in, as each state has its own laws regarding the enforceability of non-compete agreements.
In Swales, the Fifth Circuit Court of Appeals set out to clarify the “legal standard that district courts should use when deciding whether to send notice in an FLSA collective action.” Expressly rejecting the two-stage process described above, the Fifth Circuit clarified that: “Two-stage certification of § 216(b) collective actions may be common practice. But practice is not necessarily precedent. And nothing in the FLSA, nor in Supreme Court precedent interpreting it, requires or recommends (or even authorizes) any “certification” process.”
States around the country vary in how they approach the enforcement of unreasonable non-compete agreements. While the majority of states allow their courts to “blue pencil” or rewrite restrictive covenants to make them reasonable, three states do not permit such reformation, and four states have no clear legal guidance on whether blue-pencilling is permitted, leaving employers in limbo.
In non-compete disputes in Texas, employers often argue that everything that they provided to employees was confidential, while employees argue that nothing that was provided to them was confidential. As the result, the issue of confidentiality often ends up being an ultimate “fact issue” that must be resolved by a judge or a jury.
In 2021, the Texas legislature will consider employment law bills that will: expand employment discrimination to include gender identity and expression, require paid sick leave; prohibit inquiries into wage history or criminal background (prior to offer of employment); require advanced notice of work schedules in food and retail establishments; prohibit non-disclosure and arbitration contracts in sexual harassment disputes, and raise minimum wage, among others.
Wage-fixing, i.e., agreeing with competitors that everyone will pay the same wage or will not pay more than a pre-agreed amount, is illegal. Just as companies can’t get together and fix prices for goods, they are also prohibited from fixing prices for services. A recent indictment of a Texas ex-owner of a staffing agency alleging that he engaged in price fixing shows that DOJ and FBI take wage-fixing arrangement seriously. The indicted ex-owner now faces up to 15 years in prison and over a million dollars in fines.