Looking for an update on non-compete law?
The law governing non-competes varies from state to state, and new legislation has brought the federal government into the mix. A recent article provides a helpful overview of the changing legal landscape covering these litigious covenants. Topics include,
- An overview of new legislation in multiple states;
- A look at recent court decisions including on the following topics:
- Blue-penciling, aka judicial modification of a contract, such as a Nevada decision, Golden Road Motor Inc., Inc. v. Islam, 376 P.3d 151 (2016) (Nevada courts decline to re-write non-compete agreements if a part is unlawful),
- Consideration, specifically whether continued at-will employment constitutes valid consideration for a non-compete agreement, and
- What employer interests, such as trade secrets, are sufficient to support non-compete agreements;
- 2016’s Defend Trade Secrets Act (DTSA), the nation’s new federal law addressing these agreements.
As many articles have reminded employers, DTSA now requires employers to include a disclaimer that advises employees who sign such agreements they may still complain to the government and cooperate in government investigations. (Note that is a simple summary of DTSA, but specific requirements should be met in the language of that disclaimer.) The penalties for not including a DTSA disclaimer include limitations on remedies, such as the inabilty to obtain attorney fees and punitive damages. Employers should consult with legal counsel about DTSA and whether to include a disclaimer in current and future agreements.
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