States Add to ‘Fire Hose’ of Noncompete Issues Vexing Employers
Companies’ ability to block employees from going to work for a competitor keeps getting narrower and less legally certain, as state limits on restrictive employment contracts spread alongside federal scrutiny.
Minnesota just became the fourth state to ban virtually all employee noncompetes, and a slew of others have recently considered following suit. The bans add to a diaspora of limits that states have enacted over the last decade and continue to expand, many of them aimed at banning noncompetes for low- or middle-income workers or restricting their use in specific professions, like healthcare.
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“There’s just a lot going on” related to noncompete policies, said Kevin M. Passerini, an attorney with Blank Rome LLP in Philadelphia. “It’s drinking from a fire hose.”
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Businesses also can continue in many states to use nondisclosure agreements covering confidential business information and nonsolicitation agreements barring employees from attempting to carry customer relationships off to a new employer or their own company.
“Companies are going to want to be as aggressive as they can within the confines of the legislation,” Passerini said.
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"States Add to ‘Fire Hose’ of Noncompete Issues Vexing Employers," by Chris Marr was published in Bloomberg Law on June 13, 2023.