Sam Fogas’ Post

BREAKING NEWS: Non-Compete clauses are officially being eliminated. I personally think this is a huge victory for a subset of highly motivated and gifted business professionals that have been limited in their growth through this business practice. Many know that the existing non-compete clauses were ambiguous, difficult to enforce, and ultimately just there as another fear tactic, however, to see this go away warms my heart. It seems that the court, as well as myself, view this as having the potential to explode innovation and generate business in markets that have grown stagnant through contractual monopoly. Is there a downside to this decision? What are your thoughts?

Last week, the FTC introduced a new Rule that will go into effect around the end of August 2024 banning most non-compete agreements. The new Rule applies to existing and future non-compete agreements, and makes it an unfair method of competition to enter into or to attempt to enter into a non-compete agreement, except in connection with the sale of a business. For existing non-compete agreements, it is now an unfair method of competition to enforce or to attempt to enforce such agreements, or to even represent that an employee is subject to a non-compete agreement. The only applicable exceptions to existing non-compete agreements are for non-competes entered into in connection with the sale of a business and agreements with "senior executives." Employers with existing non-compete agreements with employees deemed to constitute an unfair method of competition must provide clear notice to employees before the effective date of the new Rule that such agreements will not be enforced. Read more about the new Rule here: https://lnkd.in/eJuykKUg

FTC Announces Rule Banning Non-competes - The removal of non-compete agreements could lead to increased competition as employees move more freely between companies. Small businesses should be prepared to differentiate themselves through unique value propositions, quality products or services, and excellent customer service. We have a multitude of services to support small businesses, reach out to see how we can help. #employeeengagement #employesatisfaction

The FTC issued a final rule on April 23, 2024, which, to the extent it is implemented, will ban non-competes between employers and employees. There are two main exceptions: 1. Existing non-competes with senior executives are exempt, and 2. Non-competes entered into as part of a sale of a business, ownership interest, or all of a business’s assets are also exempt. The rule also requires employers to notify employees in writing that their non-competes will no longer be enforced. The U.S. Chamber of Commerce stated it intends to oppose the rule. A suit has already been filed in federal court to challenge it. For additional information please follow the link below. If your business would like to discuss this issue in depth, our attorneys are here to help. Please call us at (617)-409-7409 for more information. https://lnkd.in/g-C3FUs5

Business Owners Alert! - The FTC has voted to approve a new rule banning non-compete clauses with employees. Under the new rule, non-competes for employees will not be enforceable after the effective date. Senior-level executives, however, will still be subject to the non-compete clause they may have signed, but the company can’t create a new non-compete or modify the current one. #smallbusiness #employmentlaw

The FTC announced a rule that existing noncompetes for the vast majority of wokers will no longer be enforceable after the rule's effective date. Employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any noncompetes against them. The new rule is slated to go into effect in 120 days after it’s published in the Federal Register. But its future is uncertain, as pro-business groups opposing the rule are expected to take legal action to block its implementation. Business groups say noncompete agreements are critical for protecting proprietary information and intellectual property, although the rule would not ban other methods for protecting that information, including nondisclosure and confidentiality agreements. They also question the agency’s authority to issue the blanket, retroactive ban.

Noncompetes banned nationwide? The FTC has announced a rule effectively banning noncompete clauses. From my experience in negotiating noncompetes, this will be a major win for employees, particularly those with specialized skills who have historically been restricted by these clauses. Employers should rest assured that actual sensitive information (like trade secrets) would remain protected, and would be wise to focus on finely tuning their NDAs to restrict data sharing that may actually hinder their businesses. They included some exclusions for bona fide business sales, which means the rule is nuanced and considers critical business interests - which means there will still be a need to carefully draft these clauses in the framework of an M&A deal. Stay tuned as this develops, and feel free to reach out if you have questions about how this might impact your business strategies. #Noncompete #FTC

Take 5 minutes to read this important insight here from my partner, Michael Avila.

The FTC just announced new rules banning all non-compete clauses, except in connection with the sale of a business. No new non-competes can be entered into, and those in existence can only be enforced against "Senior Executives"--those who make at least $151,164 a year and are in "policy-making positions." Policy-making positions are those such as an entity's president or CEO--only those with final authority to make policy decisions for an entire business or enterprise, not just a division or subsidiary of the business. The rule goes into effect in 120 days. This is a big deal for workers. Edit: As written, text of the non-compete ban also appears to bar clauses prohibiting an individual from providing services to their former employer's clients, as it bans provisions preventing someone from "seeking or accepting work in the United States with a different person . . ." which includes "any natural person, partnership, corporation, association, or other legal entity within the Commission’s jurisdiction . . . ." Non-solicit provisions, however, would still stand. #workersrights #laborlaw #employmentlaw #noncompetes #FTC

Yesterday, the Federal Trade Commission adopted a rule, in a tight 3-2 vote, banning noncompete agreements nationwide. At least one legal suit has already been filed challenging the rule and more are surely on the way. Check out my team and I's initial thoughts on the rule below. We are only at the beginning of this journey. #noncompete #ftc #employmentlawyer