Benesch reviews state, federal modifications to restrictive covenant laws -
In a “Year-End Review,” Benesch points out there was considerable activity in trade secret and restrictive covenant law in 2021. Some of the highlights include:
..N.Y. tried to join the other 49 states in adopting the Uniform Trade Secret Acts and tabled two bills relating to non-compete agreements but none of the proposed laws made it through the state legislature;
..Nev. enacted a statute prohibiting non-competition agreements covering hourly-waged workers;
..Ore. updated its Non-Competition Statute to decrease the maximum length of a restrictive contract from 18 months to 12 months and bars courts from modifying non-compete agreements that disagree with the statute;
..D.C. is expected to ban all non-competition covenants in 2022 but delayed implementation to Apr. 1 to look at a concern that employees could potentially compete with their employer during employment;
..Ill. undertook the first overhaul of its restrictive covenant statute in 200 years by establishing compensation thresholds and requiring employers to inform employees of their right to consult an attorney prior to signing a restrictive covenant agreement; and federally,
..President Biden issued an executive order encouraging the FTC to examine whether it had any jurisdiction in restrictive covenant law. The agency determined only the states have the power to legislate non-competes but that the FTC may be able to address abuses of agreements. Meanwhile, the Senate introduced a bill to ban non-competition agreements for non-exempt workers but like previous legislation introduced in 2019, it’s not gaining any traction with lawmakers.
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