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Sunday, April 26, 2026

A Ban On Employment Non-competes? What Is Being Proposed ... - Mondaq

In recent years, policymakers have shown increasing interest in limiting or eliminating non-competition/restrictive covenant clauses (known widely as "non-competes") in employment. State legislatures have led the effort but, in many cases, the new laws they passed did not cover all of the workforce—often leaving undisturbed non-competes affecting higher wage-earners. Just days ago, the Federal Trade Commission ("FTC") proposed a new federal regulation that would have the sweeping effect of banning nearly all non-competes across the country, including for doctors and other health care workers.

A non-compete clause is a contractually-binding promise by a worker not to work for or own a business that is engaged in essentially the same work they do for their present employer for some period of time after the employment relationship ends and in a prescribed geographic area. For example, if you make widgets for ABC Corp., a non-compete clause would provide that once you leave ABC Corp., you cannot make widgets for another employer within 20 miles for three years. Unless the new job would be greater than 20 miles away or you waited three years to take a job within the 20 miles, the non-compete clause would prohibit you from accepting the new job. Many non-compete clauses can be enforced in court, including the former employer seeking an injunction to prevent you from working for the new employer or imposing liquidated damages (essentially a pre-set financial penalty). In some...



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