On 8/20/2024, a Texas District Court gave employers and employees the long-awaited answer to questions surrounding the enforceability of the FTC Non-Compete Clause Rule banning non-competition clauses. Read more; however, for now, non-compete clauses will remain in effect and employers no longer need to comply with the Rule’s September 4, 2024 effective date.
On May 7, 2024, the Federal Trade Commission (FTC) published a final rule effectively banning the use of many non-competition clauses. The rule will become effective on September 4, 2024, requiring employers to discontinue non-competition clauses for some employees and notify some of the invalidity. Contact FH2 for assistance in reviewing your non-competition agreements.
Non-compete agreements and other restrictive covenants are often a concern when hiring new employees, especially those with specialized skills and abilities. Even in the absence of a restrictive covenant, however, employees and their suitors are still bound by rules that arise solely from the law. Employers must be mindful of these non-contractual restrictions when recruiting potential employees.
You have finally found a prospective employee who meets all of your search criteria and is a superstar (or prospective superstar) in the field. You want to move forward with the hiring process on an expedited basis. You extend a generous offer, which is promptly accepted. And then you discover, one way or another, that this individual has a restrictive covenant agreement with a prior employer. What should you do? What if you don’t find out about the Covenant Agreement until after you have hired the individual?
The issue of whether these class action waivers are enforceable has been a contentious issue. Specifically, federal courts have disagreed whether arbitration agreements containing a class action waiver violate the National Labor Relations Act, thus rendering them invalid and unenforceable. On May 21, 2018, the Supreme Court resolved this issue in Epic Systems Corp. v. Lewis, holding that agreements requiring employees to arbitrate claims on an individual basis are enforceable. Here’s what you need to know.
