The assault on non-compete agreements has continued in a significant way, as outlined in our web article, White House Continues Attack on Non-Compete Agreements. The latest White House document, coupled with prior reports from the White House and Treasury Department, as well as actions initiated by the Attorney General of New York and the Attorney General or Illinois, raise a number of questions about this effort to rein in the use of non-competes.
- Are employers really increasing their use of non-compete agreements with lower-level employees, or is this a matter of perception becoming reality?
- Is state legislation the answer to the perceived question, or will the courts continue to be capable of addressing these issues on a case-by-case basis?
- Is it a good idea for states to adopt what are now referred to as “red-pencil” rules of construction, especially where non-compete clauses are folded into incentive compensation or profit sharing or similar agreements or plans?
- Is the Defend Trade Secrets Act sufficient to protect employers’ legitimate business interests, when federal agencies like the SEC, NLRB and EEOC have tried to curtail the use of non-disclosure of confidential information agreements?