State Non-Compete Legislation Update

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Louisiana is not a fan of non-competes. Any employer who has employees in Louisiana is likely aware of that (or should be). Louisiana statutory code says so; case law says so; and now the Fifth Circuit has chimed in to add a little more food for thought on the subject.

In its recent unpublished decision of Rouses Enterprises, L.L.C. v. Clapp, 2022 WL 686332 (5th Cir. Mar. 8, 2022), the Fifth Circuit upheld the Eastern District of Louisiana’s decision that a non-compete was unenforceable against Rouses’ former Vice President of Center Store Merchandising, James B. Clapp II, because, when Clapp signed the non-compete agreement, he was not a Rouses employee, but merely an applicant who was later offered and accepted a job.
Continue Reading Employer Beware: When Louisiana Says “Employee”, It Means Employee

minnesota non-compete legislationOn February 22, 2022, the Minnesota legislature came one step closer to banning non-compete clauses under certain circumstances. On that date, the Minnesota House Labor, Industry, Veterans and Military Affairs Finance and Policy Committee passed HF999.

HF999 renders non-compete clauses in Minnesota void and unenforceable unless either of two circumstances are present: (1) upon termination, the employee earned an annual salary that is more than the median family income for a family of four in Minnesota (as determined by the most recent US Census Bureau data), or (2) the employer agrees to pay, on a pro-rata basis, fifty percent of the employee’s highest annual salary over the past two years for the duration that the employee is subject to the non-compete clause. …
Continue Reading Minnesota Advances Partial Ban on Non-Compete Clauses

The ongoing saga of DC’s controversial Ban on Non-Compete Agreements Amendment Act of 2020 (the “Act”) logged another chapter last week when the DC Council passed a further amendment delaying the effective date of the Act from April 1, 2022, until October 1, 2022. The Act, which was originally passed in December 2020, would prohibit employers from utilizing non-compete agreements, a statutory ban which has been adopted in certain other states, but would also prohibit employers from utilizing anti-moonlighting provisions or other “duty of loyalty” policies for DC employees. This latter prohibition would be a first-of-its-kind ban, and would prohibit employer policies which are generally viewed as both reasonable and non-controversial, even in states that have taken a negative view toward post-employment restrictive covenants.
Continue Reading The Effective Date of DC’s Non-Compete Ban Delayed Yet Again

restricive-covenenat-legislation-trendsOver the past 10–15 years, we have seen an explosion of legislative activity related to restrictive covenants. This activity is happening not only in state legislatures but on the federal level as well. While each proposal is different, we’ve certainly seen trends emerge, including required notice provisions, fee shifting, and choice of law and venue requirements.

One of the most prevalent trends is the move towards banning non-competes (and sometimes, other restrictive covenants) for so-called “low-wage workers.” To date, 10 states have implemented a low-wage ban of sorts: Illinois, Maryland, Maine, Massachusetts, Oregon, Nevada, New Hampshire, Rhode Island, Virginia, and Washington.[1]…
Continue Reading More States Eye Low-Wage Non-Compete Bans

In the first program in the 2022 Trade Secrets Webinar Series, Seyfarth attorneys Michael Wexler, Robert Milligan, and James Yu reviewed noteworthy legislation, cases, and other legal developments from across the nation over the last year in the area of trade secrets and data theft, non-competes and other restrictive covenants, and computer fraud. Plus, they provided predictions for what to…
Continue Reading Webinar Recap! 2021 Trade Secrets & Non-Competes Year in Review

Yet another state has made it harder for businesses to implement restrictive covenants—this time with criminal penalties.

Colorado’s restrictive covenants statute already provides that it is unlawful to “use force, threats, or other means of intimidation to prevent any person from engaging in any lawful occupation,” and further states that non-competes are invalid unless they fall into one of four categories:

  1. Covenants made in connection with the purchase and sale of a business (or the assets of a business);
  2. Covenants made for the protection of trade secrets;
  3. Covenants for the recovery of expenses incurred in educating and training employees who were employed for less than 2 years; and
  4. Covenants for executive and management personnel (and their professional staff) and officers.

That has been the law in Colorado for years—but a new, draconian portion of the statute will go into effect in just over a month.
Continue Reading Colorado Criminalizes Attempts to Curb Competition

What You Need to Know about the Recent Cases and Developments in Trade Secrets, Restrictive Covenants, and Computer Fraud

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In the first installment of the 2022 Trade Secrets Webinar Series,…
Continue Reading Upcoming Webinar! 2021 Trade Secrets & Non-Competes Year in Review

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On August 13, 2021, Governor Pritzker signed into law Public Act 102-0358, which amends the Illinois Freedom to Work Act and sets forth specific requirements for the enforceability of restrictive covenant agreements in Illinois for agreements entered into on or after January 1, 2022.

Income Thresholds
To be enforceable, as of the law’s effective date, non-compete agreements may only be…
Continue Reading What Employers Need to Know Regarding Illinois’ New Restrictive Covenant Law

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For the fourth time in six years, Oregon is in the news again for an update to its non-compete laws.

Prior Oregon Law

Oregon last updated its non-compete laws just two years ago, with a statute that requires employers to provide terminated employees with a signed, written copy of their non-compete within 30 days of termination. That new obligation was in addition to other Oregon-specific requirements, including:

  1. Similar to Massachusetts’ 2018 law, the employer must inform the employee that a non-compete is a condition of employment in a written employment offer received at least two weeks before the employee’s first day, or the agreement must entered into upon a “bona fide” promotion;
  2. The employee must be engaged in administrative, executive, or professional work and must (a) perform predominantly intellectual, managerial or creative tasks, (b) exercise discretion and independent judgment, and (c) be salaried;
  3. The employee’s gross annual salary and commissions at the time of termination exceeds the median family income for a four-person family; and
  4. The duration of non-compete duration could not exceed 18 months.

…
Continue Reading Oregon Blazes a Trail of Non-Compete Amendments

In a move aligned with California’s view of non-competes, the District of Columbia (subject to congressional oversight) will soon impose a complete ban on any employment covenant that restricts employment elsewhere at any time, even restrictions forbidding simultaneous employment somewhere else. On January 11, 2021, Mayor Muriel Bowser signed the Ban on Non-Compete Agreements Amendment Act of 2020 (the “Act”), which will soon become law unless Congress issues a joint resolution disapproving the Act within 30 days of receipt of the Act. The projected date for the Act to become law is March 19, 2021. Then, in all likelihood, the Act will go into effect in the fall of 2021 once the DC Council tees up a fiscal impact statement and funding for the Act after the next budget cycle.
Continue Reading District of Columbia’s Sweeping Ban on Non-Competes