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Non-Compete Agreements › Forfeiture

Non-Compete Agreements are contracts, typically formed in employment or business purchase contexts, where one party agrees to refrain from engaging in a particular line of work or pursuing business within a... more +
Non-Compete Agreements are contracts, typically formed in employment or business purchase contexts, where one party agrees to refrain from engaging in a particular line of work or pursuing business within a certain industry or locale. The purpose of these agreements is to protect employers or business purchasers from competition stemming from former employees or former owners of a business. less -
Ogletree, Deakins, Nash, Smoak & Stewart,...

Potential Impact of the FTC’s Noncompete Ban on Employee Benefits and Executive Compensation

Ogletree, Deakins, Nash, Smoak & Stewart,... on

The Federal Trade Commission’s (FTC) ban on noncompetition covenants (“noncompetes”) could significantly impact the design and administration of employee benefits and executive compensation arrangements....more

Smith Gambrell Russell

FTC Rule Banning Most Non-Competes Would Outlaw Forfeiture Provisions

Smith Gambrell Russell on

The Federal Trade Commission (“FTC”) recently issued a Final Rule (the “FTC Rule”) that, unless invalidated by the courts, will soon prohibit most non-compete provisions. In its current form, the FTC Rule will cover not...more

King & Spalding

Effect of New FTC Rule Banning Post-Employment Non-Compete Agreements on Executive Compensation Arrangement

King & Spalding on

On April 23, 2024, the Federal Trade Commission issued its final rule imposing a nationwide ban on employers using post-employment non-competes with current and former workers. Other than narrow exceptions for (1) existing...more

Kohrman Jackson & Krantz LLP

FTC’s Final Rule on Non-Compete Clauses: Implications & Considerations

Kohrman Jackson & Krantz LLP on

FTC RULE BANS NON-COMPETE CLAUSES FOR NON-SENIOR EMPLOYEES - Non-compete clauses have long been a contentious issue in employment agreements, with concerns raised about their potential to stifle competition and limit...more

BakerHostetler

Delaware Supreme Court Settles Forfeiture-for-Competition Question, Adopts Employee Choice Doctrine - Seventh Circuit Asks, ‘Are...

BakerHostetler on

Less than two months after the Delaware Supreme Court provided the employers, investment partners and other business leaders that trust in the stability of Delaware law to protect their critical business interests with the...more

Paul Hastings LLP

Delaware Supreme Court Rejects “Reasonableness” Test for Forfeiture-for- Competition Provisions

Paul Hastings LLP on

Last week, the Delaware Supreme Court reversed a Chancery Court decision that we wrote about previously, which invalidated a forfeiture-for-competition provision as an unreasonable restraint of trade. The Ainslie et al. v....more

Proskauer - Law and the Workplace

Delaware Supreme Court Validates Forfeiture-For-Competition Provision in Unanimous Reversal of Chancery Court

Proskauer - Law and the Workplace on

In a win for businesses that rely on restrictive covenants to protect their assets and investments, on January 29, 2024, the Delaware Supreme Court unanimously reversed a Chancery Court decision that invalidated a...more

Proskauer Rose LLP

What employers can do in a world without noncompetes

Proskauer Rose LLP on

Forfeiture clauses are one tactic. They provide a meaningful disincentive for employees to engage in competitive behavior. Noncompetes are under siege on multiple fronts. Originally published in Legal Dive - September...more

Proskauer - Law and the Workplace

Delaware Chancery Court Invalidates Forfeiture-for-Competition Provision in Partnership Agreement

Proskauer - Law and the Workplace on

On January 4, 2023, in Ainslie, et al. v. Cantor Fitzgerald, L.P., the Delaware Court of Chancery invalidated the forfeiture-for-competition provision in the financial services company’s limited partnership agreement, based...more

Verrill

Using a Non-Compete to Create a Substantial Risk of Forfeiture Under a Section 457(f) Plan: Limited (But Meaningful) Opportunities

Verrill on

The Treasury Department’s proposed regulations regarding the income tax treatment of “ineligible plans” of tax-exempt employers under Code Section 457(f), published in June 2016, were greeted with much fanfare. (You can...more

Skadden, Arps, Slate, Meagher & Flom LLP

Employment Flash - July 2019

Skadden, Arps, Slate, Meagher & Flom LLP on

This edition of Employment Flash looks at developments in labor and employment law, including a Supreme Court ruling that Title VII’s charge-filing requirement is nonjurisdictional and new state legislation in New York,...more

Seyfarth Shaw LLP

Not All Is Lost for California Employers: Enforce Non-Compete Forfeiture Provisions through ERISA Top Hat Plans?

Seyfarth Shaw LLP on

Even before the California Supreme Court decided Edwards in 2008, employers knew all too well the woes of attempting to enforce non-competes against California employees. Edwards simply reaffirmed California’s long-standing...more

Sunstein LLP

August 2018 IP Update - Non-Competition Agreements: Massachusetts Meets California Halfway

Sunstein LLP on

California has long led the nation in its disdain for noncompetition agreements. Pressed by venture capitalists who believe that this gives California an advantage over other states, the Massachusetts legislature has finally...more

McDermott Will & Emery

Proposed 457(f) Regulations: Opportunities and Challenges

McDermott Will & Emery on

The 2016 proposed regulations significantly expanded 457(f) plan sponsors’ ability to permit elective deferrals, use noncompetition agreements and make larger severance payments than otherwise permitted under 409A without...more

Spilman Thomas & Battle, PLLC

An Argument for the Use of Stock Options with Forfeiture Clauses for Breach of Duty of Loyalty

Spilman Thomas & Battle, PLLC on

Introduction Jimmy John’s In 2014, Emily Brunner (“Brunner”) and Caitlin Turowski (“Turowski”) filed a complaint in Illinois against the sandwich company, Jimmy John’s, and its franchise affiliates. The complaint was amended...more

Locke Lord LLP

IRS Issues Proposed Regulations Affecting Deferred Compensation Plans of Tax-Exempt Organizations

Locke Lord LLP on

On June 21, 2016, after more than 15 years of ongoing deliberations, the U.S. Department of the Treasury (the Dept. of Treasury) issued proposed regulations under Section 457 of the Internal Revenue Code of 1986 (the Code),...more

BCLP

Cautionary Observations from the Proposed 457 Regulations

BCLP on

After more than nine years of deliberations, the IRS has finally released proposed regulations governing all types of deferred compensation plans maintained by non-profit organizations and governmental entities. In...more

Mintz - Employment Viewpoints

The Impact of Recently Proposed Regulations on Ineligible Nonqualified Plans Under Internal Revenue Code § 457(f)

Mintz - Employment Viewpoints on

The Treasury Department and the Internal Revenue Service recently issued comprehensive proposed regulations governing nonqualified plans subject to tax under Internal Revenue Code § 457. Code § 457 prescribes the tax rules...more

Proskauer Rose LLP

IRS Issues Proposed Regulations Under Code Section 457

Proskauer Rose LLP on

On June 21, 2016, the Internal Revenue Service (IRS) issued long-awaited proposed Treasury Regulations prescribing rules under Section 457 of the Internal Revenue Code (the "Code") for the income taxation of deferred...more

Skadden, Arps, Slate, Meagher & Flom LLP

"New Rules Impact Compensation Arrangements of Governmental and Tax-Exempt Entities"

Skadden, Arps, Slate, Meagher & Flom LLP on

On June 22, 2016, the IRS published much-anticipated proposed regulations under Internal Revenue Code Section 457 impacting certain plans maintained by state or local governments or other tax-exempt organizations that provide...more

Cozen O'Connor

Texas Supreme Court Draws Distinction Between Loyalty Agreement and Non-Compete

Cozen O'Connor on

In many industries, it is common to pay incentives in the form of restricted stock options payable in the future if certain conditions are satisfied. In Exxon-Mobil v. Drennen, decided on August 29, 2014, the Texas Supreme...more

Littler

Texas Supreme Court Rules for Exxon: A New Day for Noncompete-Triggered Forfeitures in Texas?

Littler on

On August 29, 2014, the Texas Supreme Court in Exxon Mobil Corp. v. Drennen upheld a noncompete-triggered forfeiture provision in an executive compensation plan that applied New York law. This is a landmark decision in a...more

Nexsen Pruet, PLLC

Update: Noncompete Agreements in SC are Worth More Than the Paper They're Written On

Nexsen Pruet, PLLC on

In light of the restrictive nature with which South Carolina courts have historically viewed noncompetition agreements, many people assume they are not enforceable and, in essence, “not worth the paper they’re written on.”...more

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