By Mitchell J. Rhein
One of the biggest hot topics during the Biden administration was the legality and enforceability of non-compete agreements in employment. The Biden administration aggressively tried to eliminate employer-imposed restraints on employee mobility on multiple fronts. For example, the Federal Trade Commission (FTC) proposed to invalidate or restrict the use of noncompetition and nonpoaching agreements. Indeed, just days before President Trump was inaugurated, the FTC and Department of Justice updated the 2016 Antitrust Guidance for Human Resources Professionals to explain that non-compete, nondisclosure agreements, training repayment, and non-solicitation agreements may violate antitrust laws. The guidance also repeated the FTC’s and DOJ’s opinion that agreements between employers not to hire, solicit, or otherwise compete for workers (i.e., no-poach agreements) may result in criminal or civil liability.
Likewise, the National Labor Relations Board (NLRB) and its General Counsel launched their own attacks on non-competes (see Memorandums GC-23-08, GC-25-01, and J.O. Mory, Inc., a decision by NLRB Region 25 finding non-compete and non-solicitation provisions in an employment agreement violate the National Labor Relations Act).
With the change in administration, what does the future look like for non-compete agreements and other restrictive covenants?
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