Non-compete laws serve the purpose of protecting confidential information and preventing unfair competition. In a non-compete clause or covenant not to compete, an employee agrees that at the end of his or her employment they will not work for or start a similar business in competition with their former employer. The restrictive nature of non-compete agreements have long been debated. In fact, most states have geographic, time, and reasonableness limitations on what constitutes an enforceable covenant not to compete.
The Impact of Newly Enacted Non-Compete Laws
Effective January 1, 2020, several states have passed new legislation affecting the enforceability of non-compete agreements. Experienced business lawyers can guide employers and employees though the various state laws and offer advice on the impact of newly enacted non-compete laws.
No Non-Compete Clauses for Lower Wage Employees
Many states recently passed legislation limiting non-compete clauses for lower wage-earning employees. Maine, New Hampshire, Rhode Island, Maryland, and Washington became the most recent states to pass such legislation. While each law varies slightly, the concept is the same: Lower wage-earning employees are not receiving enough of a financial benefit from their employer to justify restricting their ability to change employers within a similar industry.
As with any new legislation, interpretation of intent and scope is left primarily with the courts. For example, labor and employment lawyers analyzing Washington’s statutory language suggest that courts may void agreements entered into prior to January 1, 2020 by retroactive application of the statute. Employers and employees will have to wait and see how courts apply the new non-compete laws throughout the coming months.
Agreement Provided at Termination
Other newly passed legislation includes Oregon’s new requirement regarding non-competes. Employers must provide employees with a signed, written copy of his or her non-competition agreement within 30 days of termination. Failure to properly provide the agreement will render the agreement voidable and unenforceable in the state of Oregon. Without a doubt, employers want terminated employees to abide by the terms of their non-compete agreement. Therefore, they will usually provide a copy upon request. The shift in Oregon law puts an active burden on the employer with sweeping consequences.
Labor and Employment Lawyers Can Help With Claims Regarding Non-Compete Laws
Employment lawyers, like the ones at Rogge Dunn Group, understand new legislation and its impact on employers and employees alike. The employment lawyers at Rogge Dunn Group are able to draft covenants not to compete to protect our clients’ trade secrets and other intellectual property. When claims arise concerning violation of a covenant not to compete, Rogge Dunn Group lawyers can quickly investigate the facts, evaluate options, and take the necessary actions. Moreover, our negotiated solutions allow our clients to accomplish their business objectives and avoid the courtroom. Some disputes, however, must be litigated. Our attorneys regularly obtain and defend against temporary restraining orders and preliminary injunctions regarding non-compete agreements.