General – Page 3 – Non-Compete & Trade Secrets Law

November 19, 2022June 22, 2023 by Duane Morris

FTC Expands Boundaries of What It Considers Unfair Competition Methods Under FTC Act Section 5

On November 10, 2022, the Federal Trade Commission (FTC) issued a policy statement that significantly expands the scope of what the FTC considers “unfair methods of competition” under Section 5 of the FTC Act (the “Policy Statement”). The announcement comes more than a year after the FTC rescinded its previous policy against pursuing “standalone” Section 5 Unfair Methods of Competition claims and interpreting Section 5 as coextensive with the Clayton and Sherman Acts. The Policy Statement appears to align with FTC Chair Lina Khan’s goal of increasing enforcement of conduct the FTC deems to be unfair regardless of whether it violates the Sherman and Clayton Acts.

Read the full Alert on the Duane Morris LLP website.

August 8, 2022June 22, 2023 by Duane Morris

District of Columbia Walks Back Noncompetition Ban in Favor of Income-Based Threshold

In our Alerts published January 22, 2021, February 17, 2021, and March 17, 2022, we detailed the Washington, D.C., Ban on Non-Compete Agreements Amendment Act of 2020. Among other provisions, had it taken effect, the 2020 Act would have rendered void and unenforceable any agreement prohibiting an employee from working for a competitor following employment and while the employee is still employed by the employer. The ban on so-called in-term restrictive covenants―standard provisions that prevent an employee from simultaneously working for a competitor of his or her employer―would have been the first of its kind.

Read the full Alert on the Duane Morris LLP website.

July 21, 2022June 22, 2023 by Duane Morris

Colorado Creates Income-Based Threshold for Noncompetition and Customer Nonsolicitation Covenants

A new Colorado law effective August 10, 2022, voids noncompetition and customer nonsolicitation covenants with certain employees who work or live in Colorado, depending on their level of compensation. The new law potentially subjects noncompliant employers to significant penalties and voids any provision in violation of the statute.

HB 22-1317, signed into law on June 8, 2022, amends Colorado’s existing noncompetition statute, C.R.S. § 8-2-113, for agreements entered into or renewed on or after August 10, 2022. The new law comes only months after Colorado enacted a criminal statute making violations of the state’s noncompetition statute a Class 2 misdemeanor punishable by 120 days in jail, a fine up to $750 or both.

Read the full Alert on the Duane Morris LLP website.

March 17, 2022June 22, 2023 by Duane Morris

Washington, D.C., Again Postpones Its Ban on Noncompetes

In our Alerts published January 22 and February 17, 2021, we detailed the various provisions of the broad, new Washington, D.C., Ban on Non-Compete Agreements Amendment Act of 2020 (the Act), slated to take effect once the District of Columbia Council funded the law through the appropriations process. Among other provisions, the Act would render void and unenforceable any agreement prohibiting an employee from working for a competitor following employment and while the employee is still employed by the employer. The ban on so-called in-term restrictive covenants―standard provisions that prevent an employee from simultaneously working for a competitor of his or her employer―would be the first of its kind in the country.

Read the full Alert on the Duane Morris LLP website.

January 28, 2022June 22, 2023 by Duane Morris

Colorado Enacts Legislation Authorizing Potential Criminal Liability for Employers that Violate State Noncompetition Statute

A new Colorado law, effective March 1, 2022, will make violations of the state’s noncompetition statute a Class 2 misdemeanor punishable by 120 days in jail, a fine up to $750, or both.

Colorado’s noncompetition statute, C.R.S. § 8-2-113, prohibits the use of “force, threats, or other means of intimidation to prevent any person from engaging in any lawful occupation at any place he sees fit.” Covenants not to compete restricting the right of any person to receive compensation for performance of skilled or unskilled labor for any employer are void under the statute unless they satisfy certain exceptions.

Read the full Alert on the Duane Morris LLP website.

August 10, 2021June 22, 2023 by Duane Morris

Oregon and Nevada Amend Noncompete Statutes and Bolster Employee Protections

Oregon and Nevada recently amended their noncompete statutes to further limit the circumstances under which employers may enforce noncompetition covenants against ex-employees.

Read the full Alert on the Duane Morris LLP website.

May 3, 2021June 22, 2023 by Duane Morris

Pennsylvania’s High Court Finds Businesses’ No-Hire Provision “Unreasonably in Restraint of Trade and Therefore Unenforceable”

In its April 29, 2021, opinion, Pittsburgh Logistics Systems v. Beemac Trucking,―A.3d―, No. 31 WAP 2019, 2021 WL 1676399 (Pa. Apr. 29, 2021), the Supreme Court of Pennsylvania weighed in on whether no-hire, or “no-poach,” provisions that are ancillary to a services contract between business entities are enforceable under Pennsylvania law. The court declined to hold such provisions per se unenforceable. Its answer for the clause at issue, however, was a resounding “no.” Now, more than ever, it is critical for Pennsylvania companies and employers to consult with legal counsel to evaluate any no-poach provisions in commercial and employment agreements to increase the chances that these provisions will be upheld.

Read the full Alert on the Duane Morris LLP website.

February 17, 2021June 22, 2023 by Duane Morris

Expect Delay of Washington, D.C., Ban on Noncompetes Until October 1, 2021

In our Alert published January 22, 2021, entitled “Washington, D.C. Employers Prepare for Broad Ban on Noncompetes and Related Workplace Policies,” we detailed the various provisions of the broad, new Ban on Non-Compete Agreements Amendment Act of 2020 and explained that the law would take effect after a 30-day congressional review period, approval and publication in the District of Columbia Register. It is important to clarify, however, that approval requires that the District of Columbia Council fund the law through the appropriations process. Therefore, the law will not actually go into effect until its inclusion in an approved budget and financial plan (the “effective date”).

Read the full Alert on the Duane Morris LLP website.

January 22, 2021June 22, 2023 by Duane Morris

Washington, D.C., Employers Brace for Noncompete Agreement Ban and Related Workplace Policies

On January 11, 2021, Washington, D.C., Mayor Muriel Bowser signed the Ban on Non-Compete Agreements Amendment Act of 2020 (the Act), which takes effect after a 30-day congressional review period, approval and publication in the District of Columbia Register. Although several nearby states, such as Maryland and Virginia, have followed the growing trend of recently enacted laws limiting the use of noncompete agreements, the Act differs in two significant respects: (1) it applies to employees at all income levels and (2) prohibits the use of noncompetes and related workplace policies during employment. As more fully discussed below, this means that employers need to take swift action to address noncompete, nonsolicitation and confidentiality agreements, as well as workplace policies aimed at preventing outside employment and conflicts of interest, as soon as possible.

Read the full Alert on the Duane Morris LLP website.

June 3, 2019 by Duane Morris

New Legislation in Washington and Oregon Limits the Enforceability of Noncompete Agreements

New legislation enacted in May 2019 will make noncompetes harder to enforce in Washington state and Oregon.

Washington State Enacts Sweeping Noncompete Legislation

On May 8, 2019, Washington became the latest state to enact comprehensive noncompete legislation. Under the Act Relating to Restraints, Including Noncompetition Covenants, on Persons Engaging in Lawful Professions, Trades or Businesses, noncompetition covenants will be void and unenforceable unless they meet a number of specific requirements. Although the act does not take effect until January 1, 2020, it impacts certain agreements signed and certain claims that arise before the effective date, as explained further below.

The act provides that noncompetition covenants are only enforceable against employees and independent contractors whose annual earnings exceed $100,000 and $250,000, respectively. These amounts will be adjusted annually, on September 30 of each year, to account for inflation…

Oregon Legislation Imposes Additional Notice Requirements on Employers

Modifications to Oregon’s existing Noncompetition Law, ORS 653.295, were signed into law on May 14, 2019, introducing additional restrictions on employers’ already curtailed ability to enforce noncompetition covenants, except with respect to certain “excluded employees” described in ORS 653.010(3). Under the newly amended legislation, employers will not only be required to meet preemployment notice requirements under the Noncompetition Law, they must now give employees postemployment notice of their noncompete obligations…

View the full Alert on the Duane Morris LLP website.