1. Many states currently enforce non-compete agreements, which restrict employees from working in a similar profession after leaving their job.
2. In Florida, non-compete agreements are enforceable if they are considered “reasonable in time, area, and line of business,” in order to protect an employer’s trade secrets, client relationships, and company goodwill.
3. In California, laws declare that contracts that restrain individuals from engaging in a lawful profession, trade, or business are void.
4. Maine prohibits the use of non-compete agreements for low-wage workers, defined as those earning at or below 400 percent of the federal poverty level. – The proposed rule by the FTC would prohibit employers from entering into non-compete clauses with workers, except for certain ownership interests.
– The FTC estimates that the proposed rule would increase employee earnings by close to $300 billion per year due to increased marketplace competition.
– Non-compete agreements are found to reduce innovation and competition in products and services by reducing entrepreneurship and new business formations while driving up costs for existing products and services. 1. Employers and other interested parties have 60 days to submit comments on the proposed rule to the FTC.
2. Employers may seek legal counsel to help draft and submit comments addressing any concerns they have about the rule.
3. The FTC will consider all comments before finalizing the rule.
https://www.hklaw.com/en/insights/publications/2023/01/to-compete-or-non-compete-rulemaking-proposal-aims-to-ban
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