On April 23, 2024, the Federal Trade Commission voted 3-2 to approve a final rule banning all employee noncompetition agreements nationwide. The rule, currently set to go into effect 120 days after publication in the Federal Register (except for the notice provision which is effective earlier), is the result of the FTC’s position that
FTC Proposes Banning Noncompetition Agreements with Employees
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
Texas Supreme Court Holds that Forfeiture Provision In Incentive Plan Not A Noncompete
I wrote about the case of Drennen v. Exxon Mobile over a year ago. Drennen was the case of the Exxon executive who forfeited millions of dollars in incentive compensation when he left Exxon to work for a competitor. You can read the background of the case here. Today, the Texas Supreme Court held that a forfeiture clause
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
Antitrust Concerns Raised When Competitors Get Too Cozy
When competitors make agreements with one another about what they will charge, the territories they will divide, the customers each will sell or the employees they will hire, red flags should raise because antitrust issues may be implicated. Last year I wrote about the settlement several Silicon Valley technology companies reached with the US Department
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