On January 5, 2023, the Federal Trade Commission (FTC) issued Notice of Proposed Rulemaking announcing that it was proposing an administrative rule that would end the use of all noncompetition agreements in employment relationships outside the context of the sale of a business. The proposed rule, among other things, labels the following as unfair methods
New Developments in Employee Hiring and Noncompetition
Last week brought several interesting developments on the issue of restrictive covenants and hiring of employees among competitors including 1) the White House’s call to action (CTA) for the States to restrict use of covenants not to compete; 2) the Department of Justice’s announcement that it intends to criminally prosecute employers and executives entering into
Court Holds that Reasonableness of Physician Buy-Out Clauses in Noncompetition Agreements Can be Challenged Even When Parties Previously Agreed to Amount
I have written several posts outlining the unique requirements that employers must include to create a valid noncompeteition agreement with a physician. (posts here and here). A recent case from the Beaumont Court of Appeals holds that even when a physician noncompetition agreement contains a reasonable buy-out clause, the employer may still have to arbitrate the
U.S. Supreme Court Holds that Arbitrator, Not State Court, Must Determine Enforceability of Noncompetition Agreement
In a per curiam opinion, the U.S. Supreme Court held that under the Federal Arbitration Act arbitrators, not courts,must determine the enforceability of covenants not to compete when the parties are subject to agreements that call for the mandatory arbitration of disputes.
In Nitro-Lift Technologies v. Howard, two employees left their employment with Nitro-Lift and began
Court Holds Forfeiture Provision in Executive Stock Incentive Program Unenforcable Noncompete
Covenant not to compete cases normally arise when an employer seeks to enforce a restrictive covenant by having a former employee enjoined from breaching the covenant and working for a competitor. They can also arise when the employee is not expressly prohibited from competing, but is subjected to severe economic penalty if he engages in
Employers Should Provide Cell Phones to Their Sales Force
Employers should provide (and pay for) the cell phones and other PDA’s used by their sales force. Why? So that the company is entitled to, and can insist on, the return of the telephone, the assigned telephone number and the contacts and other wealth of information contained on those devices when the employment relationship ends. If
Handling Texas Noncompetes After Marsh USA (Part 2)
In Part 1, I covered some thoughts on enforcing noncompetition agreements in Texas following the Texas Supreme Court’s new decision in Marsh USA. Today I’m addressing some tips that employees (and their representatives) who are asked to sign or are attempting to bust a noncompetition agreement might consider.
Prior to signing the agreement, negotiate everything
Handling Texas Noncompetes After Marsh USA (Part 1)
Yesterday, Ryan Miller and I were invited to speak at the Tarrant County Bar Association’s Labor and Employment Section luncheon. Our topic was the recent changes to Texas noncompete jurisprudence. A copy of the Power Point presentation we jointly presented can be accessed here.
For my contribution, I presented some thoughts on the practical effect the Marsh USA
Recruiters Beware of Candidates with Noncompetition Agreements
Yesterday Rob Radcliff over at the Smooth Transitions Law Blog wrote a post about a lawsuit filed by an attorney against the recruiter that placed him at his new law firm. In essence, the attorney alleged that the recruiter made representations that she was independent (and not tied to any particular law firm) and fraudulently convinced the
Physician Noncompetes: Part 2 Reasonableness Of The Buy-Out Amount
In Part 1 of this two-part series, I examined the temporal, geographic and scope of activity restrictions for Texas physician noncompetition provisions. Texas law provides another unique feature required only in agreements with doctors. Noncompetes with physicians must include a provision that permits the doctor to buy-out of the noncompete for a reasonable amount. The buy-out can be determined at