Advance Notice of Restrictive Covenants May Be Required, But They Should Not Be Executed Before Employment Begins - JD Supra
As readers of this blog are aware, many states now require employers to provide prospective employees with copies of any noncompetes (and, in some cases, other restrictive covenants) they will be required to sign as a condition of employment. For example, Massachusetts requires that noncompetes be provided at the earlier of when an offer is made or 10 business days before the first day of employment; in Illinois it is 14 calendar days before employment begins; in Maine it is three days; in New Hampshire and Washington a noncompete must simply be provided before an employee’s acceptance of an offer; in Oregon and Rhode Island it is two weeks before employment begins; and beginning August 9, 2022, Colorado will require not only that both noncompete and non-solicitation covenants be provided to employees at least 14 days before the effective date of employment, but a separate standalone notice must be provided as well.
But it does not follow that such covenants should be executed before an employee’s first day of employment. Indeed, where that occurs the covenant may not be enforceable, as the Fifth Circuit held earlier this year in Rouses Enterprises, LLC v. Clapp, C.A. No. 21-30293 (5th Cir. March 8, 2022). In that case, the Court upheld the dismissal of an action to enforce a noncompete against a former employee, James Clapp, because Clapp was not yet employed by Rouses when he signed the agreement.
Specifically, Clapp signed the agreement on December 28, 2017, but did...
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