Moving Parts: Catching Up on Noncompete Developments and What They Mean-Moving Parts: Catching Up on Noncompete Developments and What They Mean

Video Transcription

Video Summary

The talk reviewed major developments in non-compete law. It began with the historical framework: non-compete enforcement has mostly been governed by state common law, with long-standing differences among states on issues like whether continued employment is enough consideration and whether courts can “blue pencil” or rewrite overbroad restrictions. Ohio allows reformation and treats continued employment as sufficient consideration; Indiana is more limited; some states void overbroad clauses entirely.<br /><br />The speaker then covered federal activity. The FTC issued a sweeping final rule in 2024 largely banning employee non-competes, but it was enjoined and is not in effect. Still, the FTC remains active through warning letters and targeted enforcement, especially where employers use non-competes broadly. The NLRB under the Biden administration had argued non-competes could chill employees’ Section 7 rights, but that approach is no longer active.<br /><br />Most of the session focused on states, where legislation is rapidly evolving. Trends include outright bans, partial bans, salary thresholds, notice requirements, and limits on choice-of-law and venue clauses. Three new laws were highlighted: Washington’s ban effective in 2027, Virginia’s restrictions on low-wage workers plus payment requirements, and Tennessee’s presumptive limits with a $70,000 salary threshold.<br /><br />The speaker concluded with drafting and litigation strategy: tailor agreements narrowly, audit them regularly, and think carefully before sending cease-and-desist letters or choosing where to litigate.

Keywords

non-compete law

state common law

FTC rule

employee non-competes

blue pencil doctrine

choice-of-law restrictions

salary thresholds

Washington ban

Virginia non-compete restrictions