FTC bans noncompete agreements (1 Viewer)

[Sand]

Hey @Sand, you've got me quoted as saying something I didn't say.
Not a big deal, editing multiquotes trips me up too.

I try not to have a zillion lines of quotes. Sometimes this board moves text around in weird ways when you edit. Not intentional.

 

[Zow]

I'm hesitant to say anything definitive as this is very far outside my normal scope of practice, but per one of my law partners who practices in this area apparently a big decision came out today in Texas which voids the ban for the foreseeable future (at least that's his interpretation).

 

[Judge Smails]

Yep. In the news

 

[Mrs. Rannous]

I strongly suspect judge shopping.

 

[thecatch]

I strongly suspect judge shopping.

The case was brought in Dallas, where I believe there are 8 or 9 district judges and the plaintiffs could have got any of them.

 

[Snotbubbles]

I strongly suspect judge shopping.

The case was brought in Dallas, where I believe there are 8 or 9 district judges and the plaintiffs could have got any of them.

With Chevron being overruled, this looks like the first test case for regulatory rulemaking authority being challenged. I assume, the SC will find that the FTC doesn't have the authority to ban non-competes.

 

[thecatch]

I strongly suspect judge shopping.

The case was brought in Dallas, where I believe there are 8 or 9 district judges and the plaintiffs could have got any of them.

With Chevron being overruled, this looks like the first test case for regulatory rulemaking authority being challenged. I assume, the SC will find that the FTC doesn't have the authority to ban non-competes.

I tend to doubt it but it's possible. There are a million regulatory challenges percolating in the courts right now, and I expect the 5th and 11th circuits will affirm the injunctions against this rule entered by district judges in those circuits, so I'm not sure there's going to be a circuit split on this issue. Though there is a PA case out there too and maybe the Third Circuit will uphold the denial of the injunction there.

 

[Van Dyman]

So a Federal judge struck down the FTC rule banning non-compete agreements. Are we back to square one?

https://www.cnn.com/2024/08/20/business/us-judge-strikes-down-noncompete-agreements/index.html

I've been asked to sign one as a condition of employment and, to my very untrained eyes, it would seem to egregiously limit future work. Of course the document is all legal mumbo jumbo so I could be misunderstanding it. Any advice/help on this?

 

[zoobird]

I've been asked to sign one as a condition of employment and, to my very untrained eyes, it would seem to egregiously limit future work. Of course the document is all legal mumbo jumbo so I could be misunderstanding it. Any advice/help on this?

If it's a big company where everything is pretty standardized, you might not have much choice.

If small business/start-up, definitely worth trying to negotiate. Even if they won't remove it entirely, try to get one or more of these concessions in the terms:

• length of non-compete
• limit it to situations where you choose to leave, not where they let you go (but make sure it's general enough...I discovered the hard way that a 'position elimination, not for cause' doesn't automatically fall into the category of 'layoff')
• narrow scope to a handful of the most relevant competitors
• limit terms to only cover very similar role at competing company

 

[Zow]

So a Federal judge struck down the FTC rule banning non-compete agreements. Are we back to square one?

https://www.cnn.com/2024/08/20/business/us-judge-strikes-down-noncompete-agreements/index.html

I've been asked to sign one as a condition of employment and, to my very untrained eyes, it would seem to egregiously limit future work. Of course the document is all legal mumbo jumbo so I could be misunderstanding it. Any advice/help on this?

It's probably worth the cost of a consult with an employment law attorney in your jurisdiction.

 

[CletiusMaximus]

So a Federal judge struck down the FTC rule banning non-compete agreements. Are we back to square one?

https://www.cnn.com/2024/08/20/business/us-judge-strikes-down-noncompete-agreements/index.html

I've been asked to sign one as a condition of employment and, to my very untrained eyes, it would seem to egregiously limit future work. Of course the document is all legal mumbo jumbo so I could be misunderstanding it. Any advice/help on this?

It's probably worth the cost of a consult with an employment law attorney in your jurisdiction.

I think @zoobird hit the high points pretty well - its a matter of leverage in the employment process. But there is one sneaky, if a bit risky, approach I've seen some employees take over the years. If the document truly "egregiously" limits future opportunities, you could just sign it as-is with the knowledge it is unenforceable. This is where a consultation with a lawyer could help because the law obviously differs from state to state and the precise wording in your document can be important. Many companies, even larger ones, don't update their form agreements very often and in areas like this, where the law changes pretty often, these old forms can become completely unenforceable over time. If that is the case here, he might be better off not negotiating more reasonable terms and just signing the document as-is.

 

[Van Dyman]

So a Federal judge struck down the FTC rule banning non-compete agreements. Are we back to square one?

https://www.cnn.com/2024/08/20/business/us-judge-strikes-down-noncompete-agreements/index.html

I've been asked to sign one as a condition of employment and, to my very untrained eyes, it would seem to egregiously limit future work. Of course the document is all legal mumbo jumbo so I could be misunderstanding it. Any advice/help on this?

It's probably worth the cost of a consult with an employment law attorney in your jurisdiction.

So a Federal judge struck down the FTC rule banning non-compete agreements. Are we back to square one?

https://www.cnn.com/2024/08/20/business/us-judge-strikes-down-noncompete-agreements/index.html

I've been asked to sign one as a condition of employment and, to my very untrained eyes, it would seem to egregiously limit future work. Of course the document is all legal mumbo jumbo so I could be misunderstanding it. Any advice/help on this?

It's probably worth the cost of a consult with an employment law attorney in your jurisdiction.

I think @zoobird hit the high points pretty well - its a matter of leverage in the employment process. But there is one sneaky, if a bit risky, approach I've seen some employees take over the years. If the document truly "egregiously" limits future opportunities, you could just sign it as-is with the knowledge it is unenforceable. This is where a consultation with a lawyer could help because the law obviously differs from state to state and the precise wording in your document can be important. Many companies, even larger ones, don't update their form agreements very often and in areas like this, where the law changes pretty often, these old forms can become completely unenforceable over time. If that is the case here, he might be better off not negotiating more reasonable terms and just signing the document as-is.

Well I'm in TN but the non-compete states that it is subject to Texas state law, since the company is based there. Not sure TN lawyers would be the right resource, and not sure I trust my local lawyer anyway (he's also a a prominently "pro-business" member of state legislature). I have a friend in CO looking at it. CO ain't TX, and she's a trial lawyer, but better than nothing.

I don't know if they updated the language, but the documents include the company's new name after a recent rebranding...so might be somewhat up-to-date.

 

[Zow]

So a Federal judge struck down the FTC rule banning non-compete agreements. Are we back to square one?

https://www.cnn.com/2024/08/20/business/us-judge-strikes-down-noncompete-agreements/index.html

I've been asked to sign one as a condition of employment and, to my very untrained eyes, it would seem to egregiously limit future work. Of course the document is all legal mumbo jumbo so I could be misunderstanding it. Any advice/help on this?

It's probably worth the cost of a consult with an employment law attorney in your jurisdiction.

So a Federal judge struck down the FTC rule banning non-compete agreements. Are we back to square one?

https://www.cnn.com/2024/08/20/business/us-judge-strikes-down-noncompete-agreements/index.html

I've been asked to sign one as a condition of employment and, to my very untrained eyes, it would seem to egregiously limit future work. Of course the document is all legal mumbo jumbo so I could be misunderstanding it. Any advice/help on this?

It's probably worth the cost of a consult with an employment law attorney in your jurisdiction.

I think @zoobird hit the high points pretty well - its a matter of leverage in the employment process. But there is one sneaky, if a bit risky, approach I've seen some employees take over the years. If the document truly "egregiously" limits future opportunities, you could just sign it as-is with the knowledge it is unenforceable. This is where a consultation with a lawyer could help because the law obviously differs from state to state and the precise wording in your document can be important. Many companies, even larger ones, don't update their form agreements very often and in areas like this, where the law changes pretty often, these old forms can become completely unenforceable over time. If that is the case here, he might be better off not negotiating more reasonable terms and just signing the document as-is.

Well I'm in TN but the non-compete states that it is subject to Texas state law, since the company is based there. Not sure TN lawyers would be the right resource, and not sure I trust my local lawyer anyway (he's also a a prominently "pro-business" member of state legislature). I have a friend in CO looking at it. CO ain't TX, and she's a trial lawyer, but better than nothing.

I don't know if they updated the language, but the documents include the company's new name after a recent rebranding...so might be somewhat up-to-date.

But nowhere near as good as a consult with an employment law attorney in your jurisdiction. It's likely worth the few hundred bucks a consultation may cost. If the contract is being signed for employment in Tennessee, I suggest starting with a TN employment attorney.

Also, if you think you cannot trust your "local lawyer," it may be time to get a new one...

 

[Van Dyman]

So a Federal judge struck down the FTC rule banning non-compete agreements. Are we back to square one?

https://www.cnn.com/2024/08/20/business/us-judge-strikes-down-noncompete-agreements/index.html

I've been asked to sign one as a condition of employment and, to my very untrained eyes, it would seem to egregiously limit future work. Of course the document is all legal mumbo jumbo so I could be misunderstanding it. Any advice/help on this?

It's probably worth the cost of a consult with an employment law attorney in your jurisdiction.

So a Federal judge struck down the FTC rule banning non-compete agreements. Are we back to square one?

https://www.cnn.com/2024/08/20/business/us-judge-strikes-down-noncompete-agreements/index.html

I've been asked to sign one as a condition of employment and, to my very untrained eyes, it would seem to egregiously limit future work. Of course the document is all legal mumbo jumbo so I could be misunderstanding it. Any advice/help on this?

It's probably worth the cost of a consult with an employment law attorney in your jurisdiction.

I think @zoobird hit the high points pretty well - its a matter of leverage in the employment process. But there is one sneaky, if a bit risky, approach I've seen some employees take over the years. If the document truly "egregiously" limits future opportunities, you could just sign it as-is with the knowledge it is unenforceable. This is where a consultation with a lawyer could help because the law obviously differs from state to state and the precise wording in your document can be important. Many companies, even larger ones, don't update their form agreements very often and in areas like this, where the law changes pretty often, these old forms can become completely unenforceable over time. If that is the case here, he might be better off not negotiating more reasonable terms and just signing the document as-is.

Well I'm in TN but the non-compete states that it is subject to Texas state law, since the company is based there. Not sure TN lawyers would be the right resource, and not sure I trust my local lawyer anyway (he's also a a prominently "pro-business" member of state legislature). I have a friend in CO looking at it. CO ain't TX, and she's a trial lawyer, but better than nothing.

I don't know if they updated the language, but the documents include the company's new name after a recent rebranding...so might be somewhat up-to-date.

But nowhere near as good as a consult with an employment law attorney in your jurisdiction. It's likely worth the few hundred bucks a consultation may cost. If the contract is being signed for employment in Tennessee, I suggest starting with a TN employment attorney.

Also, if you think you cannot trust your "local lawyer," it may be time to get a new one...

On the bold, meh. He did our will and stuff like that, one time. Never needed a lawyer otherwise. I'd trust him with some things, but yeah he gives off some sketchy vibes.

 

[bigbottom]

Sent you a DM @Van Dyman