This is the seventh of our 12 Days of Handbook Updates that take you through 12 important topics for employers as we round out the year.
If there is a “Claus” that should be grabbing employer’s attention this holiday season, it should be the non-compete clause. One mistake employers often make is including restrictive covenants in employee handbooks. These should be in their own separate agreement and tailored to the employee and the requirements of the state where the employee works. As you've probably seen, new restrictions to non-competes have been consistent throughout 2023.
In January, the Federal Trade Commission (FTC) proposed a rule to ban non-competes entirely, arguing that the restrictions hurt workers and harm competition. However, the FTC has not voted on the proposed rule and, according to Bloomberg, the rule will likely not be voted on until April 2024.
In addition, on May 30, Jennifer Abruzzo, the National Labor Relations Board’s general counsel issued a memo saying that overbroad non-compete provisions are unlawful because they “reasonably tend to chill employees in the exercise of Section 7 rights” to engage in concerted activity under the National Labor Relations Act.
We have also seen several states pass laws regarding non-competes this year. Some states have chosen to ban non-competes entirely. California passed two laws pertaining to non-competes that will go into effect on Jan. 1, 2024. The first law says that attempting to enforce a non-compete...
A front-page article with the byline of veteran New York Times opinion writer Nicholas Kristof is the latest poisonous example of what I call the NGO “halo effect.” Headlined “The Silence That Mee...