The legal landscape is growing increasingly hostile to noncompete agreements, according to a Sept. 27 article in JDSupra by law firm Dorsey & Whitney.
Here are five things to know:
1. The Federal Trade Commission proposed a rule that would ban noncompetes nationwide, but there's still a "long road ahead" for the proposed ban, according to the report. The FTC will vote on the rule next April, and numerous small business groups and the U.S. Chamber of Commerce have submitted letters in opposition.
2. In the meantime, states are making noncompetes harder to enforce. California recently passed laws declaring noncompetes void in the state, even if entered outside of state lines.
3. Minnesota, North Dakota and Oklahoma have also banned noncompetes, and New York's legislature recently passed a bill that would outlaw noncompetes, and it now awaits the governor's signature.
4. Colorado and Washington, D.C., both recently passed laws limiting noncompetes to employees who make a certain pay threshold.
5. In general, courts have grown increasingly skeptical about employers' need for noncompetes except in cases when employees have access to truly sensitive information.