Russell Beck‘s article about a recent Federal Trade Commission and U.S. Department of Justice workshop focused on noncompete agreements was published by Law360 under the title, “What New FTC Workshop Revealed About Noncompete Regs.”
The FTC workshop follows President Biden’s Executive Order on noncompete agreements
In the article, Russell observes that:
Although the scope of the workshop was wide-ranging, there was a clear focus on noncompete agreements.
Indeed, the topic of noncompetes came up repeatedly throughout the course of the full, two-day workshop.
The discussion began with FTC Chair Lina Khan referencing noncompetes as “take-it-or-leave-it agreements.” And in the closing remarks Karina Lubell, assistant chief of the DOJ’s Competition Policy and Advocacy Section, noted that, like other vertical restrictions, noncompetes are harmful, “especially for low income and other workers ill positioned to negotiate” the restrictions “or later challenge them in court.”
During the workshop, panelists shared divergent perspectives and referenced various studies on the effects of restrictive covenants. In this regard, Russell writes that, “[w]ith so much conflicting information — studies contradicting other studies, evidence disproving studies, misplaced assumptions about the rise in use of noncompetes, etc. — and such high stakes (nothing short of the impact on the U.S. economy), regulators need to be extremely careful how they proceed. These issues are plainly more complicated than they appear, and there seems to be a general understanding that additional research is required.”
Russell’s article discusses a new study issued by the Federal Reserve Bank of Philadelphia that was not discussed during the workshop. In that study, the Federal Reserve Bank of Philadelphia’s study found “little support for the widely held view that enforcement of non-compete agreements negatively affects the entry rate of new firms or the rate of jobs created by new firms.”
To the contrary, the study — which focused on Michigan’s 1985 elimination of a ban on noncompetes — found that increased enforcement [of noncompetes] had no effect on the entry rate of startups, but a positive effect on jobs created by these startups in Michigan relative to a counterfactual of states that did not enforce such covenants pre- and post-treatment. Specifically, we find that a doubling of enforcement led to an increase of about 8 percent in the startup job creation rate in Michigan. We also find evidence that enforcing non-competes positively affected the number of high-tech establishments and the level of high-tech employment in Michigan.
According to Russell, “[t]his study thus raises the serious prospect that bans on noncompetes intended to help startups will do precisely the opposite.”
Russell frequently writes about current federal efforts to regulate noncompete agreements. He was featured on NPR discussing President Biden’s Executive Order. In April 2020, Russell Beck and Erika Hahn’s article about the FTC’s investigation about whether it should regulate noncompetes was published by Law360. In July 2019, Law360 published Russell Beck’s analysis of misconceptions in the noncompete debate. In December 2019, Law360 also published an article by Russell Beck and Erika Hahn about federal noncompete reform efforts.
For up-to-the-minute analysis of legal issues concerning trade secrets and noncompete agreements in Massachusetts and across the United States, read Russell Beck’s blog, Fair Competition Law.
eck Reed Riden LLP is among the leading authorities in trade secret, noncompete, and unfair competition law, and our experience handling these matters is backed by our extensive employment law and business litigation experience. Our hand-picked team combines attorneys with complementary expertise and practical experience.
The Wall Street Journal featured Beck Reed Riden LLP’s noncompete agreement experience. In 2016, the White House issued a report entitled, “Non-Compete Agreements: Analysis of the Usage, Potential Issues, and State Responses,” relying in part on Beck Reed Riden LLP’s research and analysis, including its 50 State Noncompete Survey.
Russell Beck’s work in this area is well recognized, and includes:
- Over thirty working on trade secret, noncompete, and unfair competition matters
- Assisting the Obama White House as part of a small working group to develop President Obama’s Noncompete Call to Action
- Authoring the book Negotiating, Drafting, and Enforcing Noncompetition Agreements and Related Restrictive Covenants (6th ed., MCLE, Inc. 2021), used by other lawyers to help them with their noncompete matters
- Authoring the book Trade Secrets Law for the Massachusetts Practitioner (1st ed. MCLE 2019), covering trade secrets nationally, with a focus on Massachusetts law
- Drafting and advising on legislation for the Massachusetts Legislature to define, codify, and improve noncompetition law
- Teaching Trade Secrets and Restrictive Covenants at Boston University School of Law
- Founding and administering the award-winning blog, Fair Competition Law
- Establishing and administering the Noncompete Lawyers and Trade Secret Protection groups on LinkedIn, with over 1,660 and 870 members, respectively, around the world
- Founded and chaired the Trade Secret / Noncompete Practice for an AmLaw 100 firm
In addition, Russell was honored for his work in this area of law in the 2020 Chambers USA Guide, which stated that Russell Beck is “an expert in the field of trade secret and restrictive covenant law,” and is also noted for his “ability to adjust and come up with successful solutions.” Chambers noted that Russell “basically wrote the new Massachusetts statute on noncompetes” and that “he’s an expert in employee mobility and nonrestrictive covenants.”
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