The U.S. Federal Trade Commission (FTC) announced on January 5, 2023 a proposed ban on non-competes across the United States. With large global employers considering the implications of the proposed rulemaking, we reached out to attorneys across Littler’s European offices to find out how the law currently regulates non-competes. We also asked whether the work of the FTC is likely to influence the laws that apply across Europe.
As in the United States, non-compete restrictions across Europe are subject to particular scrutiny both on the basis that they unfair to workers and that they stifle competition. While the United States has approached this issue mainly through the prism of encouraging competition and free market liberalism, the European perspective on this issue tends to be more heavily influenced by the policy aims of employee protection.
Terminology
At the outset a distinction should be made between two conceptually different types of “restrictive covenant” provisions. A “non-compete” is a provision that purports to prevent an employee from working for a competitor after employment with a current employer. By contrast, a “non-solicit” or a “non-poach” is a provision that purports to prevent an employee from enticing away a client or poaching a colleague (respectively), but does not prevent the employee from working for a competitor.
There is a significant degree of nuance around these concepts. In some jurisdictions, for example, an employer may not only be able to...
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