Recent Blog Posts
- Florida Law Limits Physician Restrictive Covenants in Rural Counties A recently passed Florida law, Florida Statutes 542.336 seeks to prevent medical providers from using restrictive covenants to monopolize medical specialties in rural counties. The law bars the enforcement of “restrictive covenants” against physicians who practice “a medical specialty in a county wherein one entity employs or contracts with, either directly or through related or affiliated entities, all physicians who practice such specialty in that county.” Once a second provider enters the market for a particular specialty in a county,... More
- New Hampshire Bans Noncompetes for Low-Wage Workers With its recently passed Act Relative to Noncompete Agreements for Low-Wage Employees, New Hampshire has joined a growing list of states (including Maryland and Maine) that have enacted laws barring employers from enforcing non-competition agreements against low-wage workers. The New Hampshire law prohibits employers from enforcing agreements against employees earning less than 200% of the federal minimum wage ($14.50/hour as of 2019) which limit their ability to work for another employer for (1) a specific period of time (2) in... More
- New Maine Law Bans No-Poach Agreements and Dramatically Limits Noncompetes The recently passed Act to Promote Keeping Workers in Maine is poised to dramatically alter the status of restrictive covenants in Maine. The Act accomplishes this by: (1) prohibiting employers from entering into no-poach agreements with one another; (2) barring employers from entering into noncompetes with lower wage employees; (3) limiting employers’ ability to enforce noncompetes; (4) mandating advanced disclosure of noncompete obligations; and (5) imposing a time delay between when an employee agrees to the terms of a noncompete... More
- Maryland Law Bars Enforcement of Non-Compete Agreements Against Low Wage Workers Maryland recently joined the ranks of states with laws limiting the enforcement of non-compete agreements against low wage workers. Maryland’s recently enacted law (SB 328) bars employers from enforcing non-compete agreements against workers earning less than or equal to $15 per hour or $31,200 per annum.
In a nod to employers, the statute is carefully worded to protect low wage workers exclusively and “may not be construed to affect a determination by a court in an action involving” an employee whose... More
- New Oregon Law Requires Employers to Remind Departing Employees of Their Noncompete Obligations Pursuant to a recently passed Oregon state law (HB 2992), noncompete agreements entered into on or after January 1, 2020 will only be enforceable against Oregon employees if the employer provides the departing employee with a signed copy of the agreement within 30 days after the employee’s date of termination. Though at first blush, this law merely codifies the best practice of reminding departing employees of their continuing obligations to their former employer, it contains a few nuances Oregon employers... More
- No-Poach Clauses in Franchise Agreements: Four More Franchisors Agree to Drop Them and the DOJ Weighs In on Class Actions Alleging Antitrust Violations On March 12, 2019, Dunkin’ Donuts, Arby’s, Five Guys Burgers and Fries, and Little Caesars agreed to stop including “no-poach” clauses in their franchise agreements and no longer to enforce such clauses in existing agreements. A no-poach clause is an agreement between employers not to hire each other’s employees. The franchisors agreed to end this practice following an investigation by a coalition of attorneys general from 14 states into the use of no-poach clauses in fast food franchise agreements. In... More
- Recent Decision Questions Use of No-Poach Clauses in Franchise Agreements States across the country have been using enforcement actions, legislation, and interpretive guidance to limit employers’ ability to enforce restrictive covenants against low wage workers. The recent decision in Butler v. Jimmy John’s Franchise, LLC et. al., 18-cv-0133 (S.D. Ill. 2018) suggests this trend may extend to federal antitrust law.
The Butler case relates to the legality of certain restrictive covenants in Jimmy John’s franchise agreements. The Complaint alleges that Jimmy John’s required franchisees to agree not to hire any job... More
- New York Court Limits Scope of Damage Awards in Trade Secret Actions In E.J. Brooks Company v. Cambridge Security Seals, the Court of Appeals of New York narrowed the scope of permissible damage claims plaintiffs can assert in trade secret actions under New York law. The ruling denies plaintiffs the ability to recover costs that defendants avoided through misappropriating trade secrets (known as “avoided costs” theory), making New York law less attractive to certain types of trade secret actions due to the state’s conservative approach in calculating damages.
E.J. Brooks Company d/b/a TydenBrooks... More
- South Dakota Supreme Court Limits Enforceability of Non-Solicitation Clause in Non-Compete Agreement Whenever possible, restrictive covenants should be carefully worded to track the language of applicable law in the jurisdiction where they will be enforced. The South Dakota Supreme Court’s recent decision in Farm Bureau Life Insurance Co. v. Dolly provides a strong reminder of this lesson. The case concerned an action by Farm Bureau to enforce a restrictive covenant against Ryan Dolly who had worked for Farm Bureau as a captive life insurance agent. Dolly’s contract with Farm Bureau contained a... More
- DOJ Antitrust Division Follows Through on Warnings Regarding Antitrust Scrutiny of Employer Non-Solicitation Agreements On April 3, 2018, the Department of Justice Antitrust Division (“DOJ”) announced that it had entered into a settlement with two of the world’s largest railroad equipment manufacturers resolving a lawsuit alleging the defendant employers had entered into unlawful “no-poach” agreements. The DOJ’s Complaint, captioned U.S. v. Knorr-Bremse AG and Westinghouse Air Brake Technologies Corp., 18-cv-00747 (D. D.C.) alleges that three employers referred to as Knorr, Wabtec and Faively, unlawfully promised one another “not to solicit, recruit, hire without approval,... More