Trade Secrets & Employee Mobility

Thomson Reuters Practical Law has released the 2021 update to “Non-Compete Laws: Illinois,” a Q&A guide to non-compete agreements between employers and employees, co-authored by our colleagues Peter A. Steinmeyer and David J. Clark.

This Q&A addresses enforcement and drafting considerations for restrictive covenants such as post-employment covenants not to compete and non-solicitation of customers and employees. Federal, local, or municipal law may impose additional or different requirements.

Effective January 1, 2022, the earning thresholds for employees and independent contractors in Washington who properly may be subject to noncompetition covenants will increase. The new adjusted earning threshold for employees will be $107,301.04 and the new adjusted earning threshold for independent contractors will be $268,252.59. Earnings is defined as the compensation reflected on box one of the form W-2 for employees or the payments reported on a form 1099 for independent contractors. Therefore, workers who earn amounts less than the new thresholds may not be subject to noncompetition covenants.

Our colleagues Nathaniel Glasser, Brian Steinbach, Maxine Adams, and Eric Emanuelson Jr. of Epstein Becker Green have a new post on Workforce Bulletin that will be of interest to our readers: "Washington, D.C. Postpones Ban on Non-Competes."

The following is an excerpt:

Washington, D.C. employers have more time to get their non-compete ducks in a row. On August 23, 2021, Mayor Bowser signed the Fiscal Year 2022 Budget Support Act of 2021 (B24-0373) (the “Support Act”), which includes various statutory changes necessary to implement the D.C. FY 2022 budget. As expected ...

As featured in #WorkforceWednesday:  This week, we look at the restriction and legislation of non-compete agreements.

The Future of Non-Compete Agreements

The restriction and legislation of non-compete agreements is gaining traction around the country, with states and the federal government passing or proposing new restrictions on the clauses. In July, President Biden signed an executive order that discussed the regulation of non-compete agreements, which in the past has only been the province of the states. Attorneys Pete Steinmeyer and Brian Spang discuss how the ...

On July 9, 2021, President Biden signed the Executive Order on Promoting Competition in the American Economy, which encourages the Federal Trade Commission (“FTC”) to employ its statutory rulemaking authority “to curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.”  Executive Order, Section 5(g).  While the language in the Executive Order refers to the “unfair” use of non-compete clauses, the Administration’s explanatory statement makes clear that “the President encourages the FTC to ban or ...

In January of this year, our colleagues Janene Marasciullo and David Clark wrote about federal criminal indictments issued for naked wage-fixing and no-poach agreements. They warned that these federal indictments should serve as a cautionary tale for HR and other company executives. The Illinois Attorney General’s office recently reinforced that warning at the state level.

An Illinois court recently denied a motion to dismiss an action by the Illinois Attorney General’s Office–Antitrust Unit against a manufacturing company and three staffing agencies alleging that ...

A significant opinion concerning computer security was one of those the United States Supreme Court (“SCOTUS”) issued during its end-of-term flurry this year.  Employers and others who permit computer access to sensitive information for business or other defined purposes may want to take note. Spoiler alert:  the opinion undercuts use of the Computer Fraud and Abuse Act of 1986 (“CFAA”), 18 U.S.C. §1030 et seq., to obtain federal jurisdiction in employer-employee disputes. (As a practical matter, the Defend Trade Secrets Act of 2016 had already filled the gap for many ...

Our colleagues David S. Poppick and Carol J. Faherty have co-authored the 2021 update to “Trade Secret Laws: Connecticut,” a Q&A guide to state law on trade secrets and confidentiality for private employers in Connecticut, published by Thomson Reuters Practical Law.

Following is an excerpt (see below to download the full version in PDF format):

This Q&A addresses the state-specific definition of trade secrets and the legal requirements relating to protecting them. Federal, local, or municipal law may impose additional or different requirements. Answers to questions ...

Governor Steve Sisolak recently signed Assembly Bill 47, which amends Nevada’s statute governing noncompetition agreements (Nevada Revised Statutes 613.195).  Employers should be aware of the following changes to the law, which will go into effect on October 1, 2021.

First, under the amended Nevada statute, employers are explicitly prohibited from bringing an action to restrict a former employee from providing service to a former customer or client if:

1. the former employee did not solicit the former customer or client;
2. the customer or client voluntarily chose to leave and seek ...

We’d like to share an article we wrote recently in Law360: “Illinois Noncompete Reform Balances Employee and Biz Interests.”

Following is an excerpt (see below to download the full version in PDF format):

Over Memorial Day weekend, the Illinois Legislature accomplished something truly remarkable: a comprehensive reform of noncompete and nonsolicit law that was passed unanimously by the Illinois Senate and House of Representatives.

The reform bill is not a complete ban, as some competing bills and employee advocates originally sought. And the bill is certainly not ...