Non-Competes Continue To Be Restricted Further

As we noted in the February edition, California mandated both an end to non-compete agreements and the distribution of a notice to that effect to individuals previously covered under same. Other states are at various stages of following suit:

• Washington State: Effective June 6, new restrictions added, including minimum compensation levels allowed for coverage, an 18-month duration limit, termination compensation, broader coverage and narrower exceptions. 

• Maine: A complete ban was vetoed by the governor; the existing bill is already very restrictive. 

• New York: As with Maine, a full ban was vetoed by the governor on the basis that it would have been potentially harmful to businesses. The existing law is already very restrictive, but three new bills have been introduced to further restrict non-competes. 

• Federal Government (FTC): The FTC proposal would ban all non-competes. It is anticipated to be finalized this month, with an effective date 60 days after that, followed by a 180-day compliance adjustment period for employers. Court challenges are expected, however, so the final outcome is not certain at this point.