State-Specific Non-Compete Laws: Non-compete laws vary significantly by state, with some states like California prohibiting them almost entirely, while others impose specific duration and scope restrictions. Recent reforms in states like Illinois and Washington have further limited non-compete agreements.
FTC Proposed Rule 2023: The Federal Trade Commission's proposed rule from 2023 which aims to ban non-compete clauses nationwide, potentially affecting the enforceability of such agreements.
Federal Antitrust Laws: Federal antitrust regulations that may impact the scope and enforcement of non-compete agreements, particularly in terms of market competition and labor mobility.
Fair Labor Standards Act: Federal law governing wage and hour standards that must be considered when drafting employment-related agreements, including non-competes.
National Labor Relations Act: Federal law protecting workers' rights to organize and bargain collectively, which may affect the terms and conditions of non-compete agreements.
Employment Classification Requirements: Considerations regarding temporary worker status vs. employee status, independent contractor regulations, and the joint employer doctrine as they apply to non-compete restrictions.
Time Limitations: Requirements for reasonable time restrictions in non-compete agreements, which must be limited to protect legitimate business interests without unduly burdening workers.
Geographic Scope Restrictions: Rules regarding reasonable geographic limitations in non-compete agreements, which must be properly tailored to the employer's legitimate business territory.
Legitimate Business Interests: Legal requirement that non-compete agreements must protect legitimate business interests such as trade secrets, confidential information, or customer relationships.
Consideration Requirements: Legal requirement that employees must receive adequate consideration (something of value) in exchange for signing a non-compete agreement.
Garden Leave Provisions: Emerging trend in non-compete agreements where employers pay employees during the restricted period after employment termination.
Wage Thresholds: Recent legal trends establishing minimum salary thresholds below which non-compete agreements cannot be enforced.
