2023 RECAP Employee Defection and Trade Secrets
2023 Recap
Bombshell: Federal Government Proposes Non-Compete Ban The year started with a bang back in January when the Federal Trade Commission proposed a rule that would ban most non-compete agreements across the country. We summarized the proposal here and followed up with detailed FAQs. Employers were left to play a painful waiting game for the rest of the year as the news emerged that the rule was not scheduled to be finalized until April 2024. We provide a seven-step guide for employers to follow as we continue to wait. Labor Board Counsel Says Non-Competes Violate Federal Labor Law The hits kept coming in May when NLRB General Counsel Jennifer Abruzzo announced that many non-competes violate federal labor law – regardless of whether you have a unionized workforce. She urged NLRB regional directors to find that many employer-mandated non-compete agreements infringe on employees’ rights under Section 7 of the National Labor Relations Act (NLRA), continuing the federal government’s assault on these restrictive covenants. States Pass New Restrictive Covenant Laws Typically, most restrictive covenant action takes place at the state level. And just because the feds took some dramatic action in 2023 doesn’t mean things remained quiet in states this past year. Minnesota banned non-competes in May, California further clamped down on their use with a pair of new laws finalized this fall, and New York stands on the brink of banning non- competes. Meanwhile, Colorado made it more difficult to use nondisclosure agreements in June, and a court decision from Georgia means that employers might find it more difficult to enforce non-solicitation provisions.
Michael Elkon Partner Atlanta melkon@fisherphillips.com
Robert Yonowitz Partner Irvine ryonowitz@fisherphillips.com
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