Companion Greg Care spoke with The Every day File concerning the results of the Federal Commerce Fee’s vote to ban non-competition (or non-compete) agreements for U.S. staff in a current rulemaking. The ban is ready to take impact within the coming months pending some extant authorized challenges to the rule.
Greg mentioned the FTC’s rule is bold and expansive in breadth, however welcome for his shoppers and the general reform of non-compete agreements.
Whereas the FTC’s ban on non-competes has resulted in blended reactions from Maryland organizations and people, Greg advised TDR that one thing “the FTC was very cautious to level out was this ultimate rule … nonetheless permits employers to implement nondisclosure agreements and non-solicitation agreements,” Greg mentioned.
Greg defined that based mostly on case legislation in Maryland, “it’s clear that the protectable curiosity that employers have isn’t to stop competitors.”
As an alternative, Greg mentioned, Maryland case legislation expressly says employers can’t attempt to “maintain on” to a specific worker to stop competitors with them however can protect the goodwill the worker builds together with his or her work with the employer.
“It’s not competitors, it’s preservation of goodwill, and that’s a very necessary distinction that I believe plenty of the arguments in opposition to non-competes don’t actually acknowledge,” Greg advised the publication.
Learn extra about Greg’s key takeaways from the Federal Commerce Fee voting to impose a close to whole ban on non-compete clauses in america in his current weblog submit.
Earlier throughout this yr’s legislative session in Maryland, laws handed that will prohibit non-compete agreements for sure veterinary and well being care professionals. Governor Wes Moore signed the invoice into legislation on April 25, 2024.
“This is a vital step ahead within the reform of non-compete clauses that each one too typically have a deleterious impact on our well being care workforce and the general public,” Greg mentioned in a weblog about this laws.
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