Laws governing the use of restrictive covenants have been changing recently, so HR professionals and employers need to stay abreast of updates that occur in their state.
Gregory Hare, a lawyer with Ogletree Deakins in Atlanta, presented some practical tips and best practices for using restrictive covenants, such as noncompete agreements, nondisclosure agreements and nonsolicitation agreements, at the SHRM Annual Conference & Expo 2022 in New Orleans on June 13.
State Restrictions
"States are making it harder" to use noncompete agreements, but restrictions vary by state, Hare noted.
At the same time, the Biden administration has "really been harping on this," arguing that noncompete agreements are an unfair restriction on trade or an unfair suppression of wages, Hare said. "They are pushing this rock up the hill." But he doesn't expect to see federal regulations prohibiting the use of noncompete agreements in the near future.
In some states, you can't enforce a noncompete agreement unless the person worked for your company for at least two years. Some states don't allow companies to enforce noncompete agreements unless the person was a high-earner, making above a certain amount in annual salary.
Some states don't permit noncompete agreements unless you tell employees about it on their first day of employment. In other cases, you can introduce a noncompete agreement when an employee gets a promotion to a certain level within your company, such as moving up from midlevel...
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