Just one day after entering into consent agreements invalidating non-competes with three companies, on January 5, 2023, the Federal Trade Commission (FTC) proposed a new non-compete rule that would prohibit employers from entering into, maintaining, enforcing or threatening enforcement of a non-compete clause with virtually any worker and invalidate existing non-compete clauses with both current and former workers. If the non-compete rule is finalized by the FTC in the same or substantially same form as proposed, and if it survives the legal challenges that are sure to follow, the non-compete rule would make non-compete clauses an unfair method of competition under Section 5 of the FTC Act, regardless of inconsistent state statutes, regulations, orders or interpretations, and would represent a sea change in the law relating to non-compete clauses in the United States.
Rea the full Alert on the Duane Morris LLP website.
By Gregory S. Bombard
On June 9, 2017, the Business Litigation Session (BLS) of the Massachusetts Superior Court issued a decision about the extraterritorial application of California’s public policy against non-competition agreements (Full text of the decision: Oxford Global Resources, LLC v. Jeremy Hernandez). The plaintiff, Oxford, is a recruiting and staffing company headquartered in Massachusetts. It hired the defendant to work as an entry-level “account manager” in an office in California. As a condition of his employment, the employee signed a “protective covenants agreement” that included non-solicitation, non-competition, and confidentiality provisions. This agreement contained a Massachusetts choice-of-law provision and a Massachusetts choice-of-venue provision. Continue reading “Massachusetts Court Rules California Law Supersedes Massachusetts Choice-of-Law Provision and Non-Compete Clause in Employment Contract”
The Pennsylvania Superior Court’s recent decision in Metalico Pittsburgh, Inc. v. Douglas Newman, et al., No. 354 WDA 2016, 2017 PA Super. 109 (Apr. 19, 2017), confirms the importance of careful contractual drafting in agreements containing non-compete clauses and other post-employment restrictive covenants. In circumstances where an employee is hired for a term of employment but later becomes an at-will employee, that contractual language may determine the enforceability of the agreement’s non-compete and non-solicitation provisions.
To read the full text of this post by Duane Morris partner Luke McLoughlin, please visit the Duane Morris Appellate Review Blog.