Recent Blog Posts
- Washington State’s New Law Limits Enforceability of Noncompetition Agreements Non-competes are going to be harder to enforce in Washington State. On May 8, 2019, Governor Jay Inslee signed the “Act Relating to Restraints, Including Noncompetition Covenants, on Persons Engaging in Lawful Professions, Trades or Businesses,” which was passed by both houses of the state legislature in April.
The new law will become effective January 1, 2020, and will render unenforceable non-competition provisions signed by employees earning less than $100,000 and independent contractors earning less than $250,000 annually. Other important provisions... More
- Bipartisan Group of Six Senators Seeks GAO Review of Non-Competes On March 7, 2019, a bipartisan group of U.S. Senators sent a letter to the Government Accountability Office (“GAO”), requesting that the agency perform a review of the effect of non-competition agreements “on workers and on the economy as a whole.” The six signatories to the letter were Chris Murphy (D-CT), Todd Young (R-IN), Elizabeth Warren (D-MA), Marco Rubio (R-FL), Tim Kaine (D-VA), and Ron Wyden (D-OR). In particular, they asked the GAO to assess:
What is known about the prevalence... More
- Of Non-Competes, Elizabeth Warren and Marco Rubio In the last couple of years, there have been a number legislative efforts, at both the state and federal level, to limit the use of non-competes in the U.S. economy, particularly with respect to low wage and entry level workers. Recent bills introduced in the Senate indicate there is a strong opportunity for a bipartisan path to enactment of such a law by the U.S. Congress.
Last month, Marco Rubio, one of Florida’s U.S. Senators and a previous Republican candidate for... More
- Non-Compete Laws Affecting Health Care Professionals in Various U.S. Jurisdictions Many physicians and other health care workers are familiar with restrictive covenants like non-competition and/or non-solicitation agreements, either as employees who have been asked to sign such covenants as a condition of their employment or as business owners seeking to enforce such covenants to protect their medical practices from competition. These covenants are usually designed to prohibit physicians or other practitioners from leaving and setting up a competing practice nearby using patient contacts, information, and/or training that they received during... More
- Non-Competes Continue to Face Political Headwinds Legislative efforts to limit or ban the use of non-compete provisions in employment agreements have proliferated in the early months of 2018.
Perhaps most eye-catching was legislation (titled the “Workforce Mobility Act”) introduced in the U.S. Senate in late April 2018 that would prohibit employers from enforcing or threatening to enforce non-compete agreements with employees and require employers to post prominently a notice that such agreements are illegal. Co-sponsored by Democratic Senators Chris Murphy (CT), Elizabeth Warren (MA) and Ron Wyden... More
- Legitimate Business Interests: The Touchstone of Non-Competes A little-noticed decision from earlier this year rendered by the Supreme Court of New York, Westchester County, demonstrates how enforcement of post-employment restrictive covenants will often boil down to a single question: does the restriction protect a legitimate business interest of the employer?
In Cindy Hoffman, D.O., P.C. v. Raftopol, plaintiff applied for a preliminary injunction against its former employee, a physician’s assistant, who began working for a competitor in technical violation of her past employment non-compete restriction which barred her... More
- Mile High Non-Compete Law: Colorado Court of Appeals Determines Enforceability of Liquidated Damages Clause in Physician Non-Compete Agreement The Colorado Court of Appeals, in Crocker v. Greater Colorado Anesthesia, P.C., recently examined several unique enforceability considerations with respect to a physician non-compete agreement. Of particular interest was the Court’s treatment of a liquidated damages provision in the agreement. Pursuant to a Colorado statute (8-2-113(3), C.R.S. 2017), the Court held that the provision was unenforceable because the liquidated damages were not reasonably related to the injury actually suffered.
Michael Crocker, a former physician-shareholder at Greater Colorado Anesthesia (Old GCA), signed... More
- Non-Compete Laws: Illinois Guide Published with Thomson Reuters Practical Law We just published an article with Thomson Reuters Practical Law discussing non-compete agreements between employers and employees for private employers in Illinois. With Thomson Reuters Practical Law’s permission, we have attached it here.... More
- Antitrust Action Against No-Poaching Agreements: Obama Policy to Be Continued by the Trump Administration On October 20, 2016—just about three weeks before the presidential election won by Donald Trump—the Department of Justice and the Federal Trade Commission issued a remarkable document, entitled “Antitrust Guidance for Human Resources Professionals,” which outlined an aggressive policy promising to investigate and punish employers, and even individual Human Resources employees, who enter into unlawful agreements concerning recruitment or retention of employees. As stated in that document, “[a]n agreement among competing employers to limit or fix the terms of employment... More
- Judge and Jury Clear Financial Firm of Poaching and Trade Secrets Claims Financial analytics firm Novantas, Inc. and two individual defendants closed out 2017 with a victory, securing the dismissal of claims by rival First Manhattan Consulting Group LLC (“First Manhattan Consulting Group”) , which accused them of competing unfairly by poaching First Manhattan Consulting Group’s employees in order to steal its trade secrets. The result demonstrates the need for plaintiffs in such cases to be able to prove with specificity which trade secrets were taken or threatened by the defendants’ conduct.