Sarah Tishler Quoted in Article about FTC’s Noncompete Ban

Sarah Tishler was recently quoted in an article about the Federal Trade Commission’s new rule banning noncompete agreements.

The article, titled “FTC’s Noncompete Ban a Blow to Asset Managers,” appeared in Ignites, a service from the Financial Times.

he article discusses the FTC’s issuance of a proposed final rule restricting noncompete agreements nationwide for most workers, as well as efforts by several entities to stop implementation of the rule through various lawsuits.

In the article, Sarah discusses the impact of restricting noncompete employment agreements as follows:

Noncompetes are “part of the normal set of options” available to a fund firm to protect proprietary information when an employee leaves, and they are especially relevant for the departure of “relationship-centric” employees, said Sarah Tishler, an attorney at Beck Reed Riden who is not related to the suits.

“If noncompetes are truly off the table, the likely outcome is an increase in the amount of trade secret litigation when fund employees go to a competitor,” Tishler said. “Without noncompetes, I think it is likely that there will be a lot of thought given to incentivizing top performers to stay, to avoid any temptation to jump to a competitor firm.”

The April 26, 2024, was written by Sabrina Kharrazi.


Sarah Tishler is a commercial litigator whose practice focuses on complex business disputes in state and federal courts, including intellectual property, breach of contract, and fraud claims.


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.

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment.

We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Bloomberg Law Features Russell Beck on Noncompete Agreements

Russell Beck was quoted in a Bloomberg Law article about the FTC’s proposed final rule banning noncompete agreements.

The story is titled “Noncompete Ban Amplifies Biden Push to Loosen Worker Contracts.” The April 24, 2024, article was written by Danielle Kaye and Parker Purifoy.

The article discusses the Federal Trade Commission’s issuance of a proposed final rule restricting noncompete agreements nationwide for most workers.

The article quotes Russell discussing the White House strategy behind the use of administrative agencies to regulate employment agreements as follows:

“You’ve got some members of Congress and administration saying, if you can’t do it through Congress, we’ll try another approach,” said Russell Beck, a trade secrets lawyer at Beck Reed Riden LLP. “Here’s the other approach.”

The April 24, 2024, article was written by Danielle Kaye and Parker Purifoy.


Russell frequently writes about current efforts to regulate noncompete agreements. He was featured on NPR and quoted in the New York Times discussing federal regulatory efforts targeting noncompete agreements. In January 2023, Russell wrote an article for Law360 called “Companies Must Brace For FTC’s Overbroad Noncompete Rule.” Russell recently published a helpful guide for employers seeking to protect confidential information following implementation of a nationwide noncompete ban.

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.

Beck 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 years of experience 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.”

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment.

We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Russell Beck Featured in Law360 on California’s Expanded Noncompete Ban

Russell Beck‘s article about California’s new, expanded, anti-restrictive covenant laws was published by Law360 under the title, “Get Ready for Calif.’s Expanded Restrictive Covenant Ban.

The article, reprinted in full below, analyzes California’s new law expanding the scope of their restrictive covenant ban.

n October 13, California Gov. Gavin Newsom signed the second of two bills that, together, expand California’s restrictive covenant law and prioritize it over the laws of every other state.

The two new laws go into effect on Jan. 1, 2024, and will operate retroactively.

What do you need to know?

First, the background.

While most states permit reasonable employee noncompete agreements,[1] California has banned employee noncompetes since 1872.[2]

Some courts, however, had interpreted Californina Business and Professions Code Section 16600 — California’s noncompete statute — as making illegal only “those restraints which preclude one from engaging in a lawful profession, trade, or business,” but permitting restrictive covenants “where one is barred from pursuing only a small or limited part of the business, trade or profession.”[3] This interpretation was generally referred to as the narrow restraint doctrine.

In 2009, in Edwards v. Arthur Andersen LLP, the California Supreme Court rejected the narrow restraint doctrine and made it clear that the ban applied not only to noncompetes, but to nonsolicitation of clients as well.[4]

Following that decision, other courts in California have found no-recruit agreements[5] and broad confidentiality agreements to be banned by the statute as well.[6]

hat brings us to this year.

During September and October, the California Legislature extended the ban even further through two new laws.

The first law — S.B. 699 — adds Section 16600.5 to the California Business and Professions Code. With that new law, which will become effective on Jan. 1, California essentially thumbed its nose at all other state laws, virtually saying, “California’s public policy against restraint of trade law trumps other state laws.”

The impact of the law is extreme. By way of example, an employee living in Massachusetts with a noncompete executed in Massachusetts, valid in Massachusetts, enforceable in Massachusetts, and for which the employee received substantial consideration, can — according to California’s soon-to-be-effective law — flee to California, void the contract and ignore those otherwise-lawful obligations with impunity.[7]

Whether this law is constitutional or will be enforced by non-California courts remains to be seen.

However, apparently unsatisfied with merely imposing its existing state policy on the rest of the country, California has doubled down on its policy, both expanding the scope of its restrictive covenant ban and imposing additional obligations on companies using restrictive covenants.

Specifically, the law signed by Newsom on Oct. 13 — A.B. 1076 — changes California’s noncompete statute in several ways.

First, it mandates that Section 16600 “shall be read broadly, in accordance with Edwards v. Arthur Andersen … to void the application of any noncompete agreement in an employment context, or any noncompete clause in an employment contract, no matter how narrowly tailored.”[8]

Second, it prohibits companies from including “a noncompete clause in an employment contract, or … requir[ing] an employee to enter a noncompete agreement, that does not satisfy an exception in this chapter.”[9] To be clear: This does not just void an agreement or render it unenforceable — it prohibits its use.

Third, it requires companies — by Feb. 14, 2024 — to notify employees subject to a covenant that violates Section 16600 that their restrictions are void.[10] This notice requirement applies to current employees, as well as to former employees who were employed after Jan. 1, 2022.[11] The notice must be “in the form of a written individualized communication to the employee or former employee, and shall be delivered to the last known address and the email address of the employee or former employee.”[12]

Fourth, not surprisingly, the new law also adds penalties for failing to comply by making it “an act of unfair competition” to violate the statute.[13]

ow will this affect you?

First, the new law immediately presents a threshold question: What agreements, in addition to noncompetes and nonsolicitation covenants, are covered?

Although purporting not to constitute a change, but rather to be “declaratory [of] existing law,”[14] the law does in fact expand on existing case law.

For example, it seems to change the law on no-recruit agreements. Currently, the law is unsettled. But the following language suggests that no-recruit agreements will likely be prohibited going forward: “This section shall not be limited to contracts where the person being restrained from engaging in a lawful profession, trade, or business is a party to the contract.”[15]

This language presumably covers many other agreements as well. For example, it seems to prohibit joint venture agreements and confidentiality agreements in connection with a possible merger or acquisition, where the company parties agree not to hire the other party’s employees during the joint venture or exploratory period — putting aside for some time after.[16]

Similarly, broad confidentiality agreements are likely also covered, at least to the extent that the confidentiality obligations could be interpreted to be so broad as to effectively prevent someone from working in their field, i.e., effectively constituting a noncompete agreement.[17]

Second, the new law will affect different companies and employees differently.

From the perspective of a company that is incorporated or headquartered in California, there is an argument that the company simply cannot use noncompetes, nonsolicits, no-recruits, broad nondisclosure agreements or other agreements that might violate the new law with anyone. Full stop. No employees. Nowhere.

To the extent that the company is using any of these restrictive covenants, it will need to take steps to promptly undo those agreements and notify affected employees — and others with whom they may have such agreements.

From the perspective of a company outside of California with employees in California, the new law can still be an issue. Companies with California employees who have noncompetes or nonsolicits — and likely no-recruits and broad nondisclosure agreements — will need to promptly come up with a plan for complying with the new law.

For example, such companies will need to consider whether to send notices at all and, if so, which employees they will send notices to. And they will need to consider whether and how to address no-recruit agreements and confidentiality agreements. They will also need to make sure that they are taking reasonable measures to protect their trade secrets, other confidential information, customer and employee goodwill, and any other legitimate business interests.

From the perspective of an employee, this is obviously a boon. I expect we will see an increased number of employees fleeing — at least temporarily — to California to void their restrictive covenants. California will become even more of a clearing house for employees who live, work and enjoy benefits received in other states, in exchange for agreeing to a restrictive covenant. Specifically, many of those employees are likely to relocate to California to relieve themselves of their otherwise-enforceable contractual obligations.

We will have to see how this all plays out, but I fully expect that there will be plenty of legal challenges to the law. And I expect they will come soon, given the Jan. 1, 2024, effective date, the laws’ retroactive operation and the Valentine’s Day deadline to send notice to affected employees.

hat steps should you take now?

As noted above, the time to come up with a plan for compliance with the new California laws is short. Planning should start now.

Separately, now is also the time to revisit how your company — or your clients’ companies — protects confidential information, including trade secrets, and other legitimate business interests. While there are many contractual options,[18] including for example, deferred compensation plans governed by the Employee Retirement Income Security Act that have forfeiture-for-competition provisions,[19] their effectiveness may be questionable in light of California’s new laws.[20]

For that reason, it is all the more important to have a comprehensive trade secret — and other legitimate business interest — protection plan in place now.

A good starting point is to review all documents related to protecting the company’s legitimate business interests. Those documents include any restrictive covenant agreements, whether contained in employment agreements, restricted stock unit agreements, stock option agreements, long-term incentive agreements or other agreements, and policies and codes of conduct. All such documents should be brought into compliance and strengthened as much as permissible and appropriate.

From an operational standpoint, make sure that there is a culture of confidentiality. That is not to say that all information needs to be locked down; there is always a balance. If information is locked down too tightly, work becomes less efficient and people will find workarounds, likely resulting in even less security for the information.

Training is critical.[21] And it should be provided at all stages of the employment life cycle where there is a risk of infiltration of — and contamination by — someone else’s information, or a risk of exfiltration and loss of trade secrets. Training of some sort should be conducted during the recruiting and onboarding process, through and during the employment relationship, and at off-boarding.

Given that the goal is to protect trade secrets, as well as customer relationships and other legitimate business interests — as opposed to being able to win a costly, time-consuming lawsuit after the fact — preemptive measures are critical. Take them now before there is a problem. It truly is the case that an ounce of prevention is worth a pound of cure.


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 years of experience 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.”

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment.

We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.


[1] See Beck, Employee Noncompetes, A State-by-State Survey (“50 State Noncompete Survey”), available at https://www.beckreedriden.com/50-state-noncompete-chart-2/.

[2] See Cal. Bus. & Prof. Code § 16600.

[3] See Campbell v. Trustees of Leland Stanford Jr. Univ ., 817 F.2d 499, 502-03 (9th Cir. 1987) (citations omitted).

[4] Edwards v. Arthur Andersen , 44 Cal.4th 937, 81 Cal. Rptr. 3d 282, 189 P.3d 285 (Cal. 2008). The “narrow restraint” exception was, as its name implies, an interpretation of Cal. Bus. & Prof. Code § 16600 that permitted certainly narrowly tailored restrictive covenants.

[5] No-recruit agreements are often called “employee nonsolicitation clauses” (or simply “nonsolicitation agreements”) or “no-raid” agreements.

[6] See, e.g., AMN Healthcare, Inc. v. AYA Healthcare Servs., Inc ., 28 Cal.App.5th 923, 936-939, 239 Cal. Rptr. 3d 577 (Cal. Ct. App. 2018) (no-recruit agreements); Parsable, Inc. v. Landreth , 2022 WL 19692034, at *3-4 (N.D. Cal. Aug. 5, 2022) (no-recruit agreements); Brown v. TGS Mgmt ., 57 Cal.App.5th 303, 271 Cal. Rptr. 3d 303 (Cal. Ct. App. 2020) (broad confidentiality agreement). Instructively, none of these cases was decided by the California Supreme Court, and therefore they do not overrule preexisting case law, including case law suggesting that no-recruit agreements are permissible under Cal. Bus. & Prof. Code § 16600, such as Loral v. Moyes , 174 Cal. App. 3d 268, 278-280 (1985).

[7] This new law is discussed in some detail in Russell Beck, California is set to (officially) tortiously interfere with noncompetes from other states (Sept. 6, 2023), available at https://faircompetitionlaw.com/2023/09/06/california-is-set-to-officially-tortiously-interfere-with-noncompetes-from-other-states/; and Sarah Tishler, Calif. Law Tests Noncompete Prohibitions’ Potential Reach (Oct. 3, 2023), available at https://www.law360.com/articles/1726065/calif-law-tests-noncompete-prohibitions-potential-reach.

[8] New Cal. Bus. & Prof. Code § 16600(b)(1).

[9] New Cal. Bus. & Prof. Code § 16600.1(a).

[10] New Cal. Bus. & Prof. Code § 16600.1(b)(1).

[11] Id.

[12] New Cal. Bus. & Prof. Code § 16600.1(b)(2).

[13] New Cal. Bus. & Prof. Code § 16600.1(c).

[14] New Cal. Bus. & Prof. Code § 16600.1(b)(2).

[15] New Cal. Bus. & Prof. Code § 16600(c).

[16] Though perhaps offering little solace, while these types of B2B agreements might be void under section 16600, they likely do not constitute an act of unfair competition under 16600.1(c) insofar as they neither are in an employment contract nor “require an employee to enter a noncompete agreement . . . .”

[17] See Brown v. TGS Mgmt. , 57 Cal.App.5th 303, 271 Cal. Rptr. 3d 303 (Cal. Ct. App. 2020); FTC proposed “Non-Compete Clause Rule,” available at https://www.federalregister.gov/documents/2023/01/19/2023-00414/non-compete-clause-rule.

[18] For some suggestions, see Russell Beck and Erika Hahn, 3 Ways To Plan For A Possible Federal Ban On Noncompetes (March 17, 2021), available at https://www.law360.com/articles/1363450/3-ways-to-plan-for-a-possible-federal-ban-on-noncompetes; Russell Beck, Change of Course on Noncompetes: President Biden to Issue Executive Order (July 8, 2021), available at https://faircompetitionlaw.com/2021/07/08/change-of-course-on-noncompetes-president-biden-to-issue-executive-order/.

[19] See Gretchen Harders and Cassandra Labbees, ERISA Nonqualified Deferred Compensation Plans, Restrictive Covenants, and ERISA Preemption (June 27, 2019), available at https://www.natlawreview.com/article/erisa-nonqualified-deferred-compensation-plans-restrictive-covenants-and-erisa#:~:text=A%20restrictive%20covenant%20in%20a,a%20result%20of%20the%20behavior.

[20] Some of these agreements may also be of questionable utility if the Federal Trade Commission moves forward with a rule that would ban noncompete agreements as well as any other agreements that the FTC interprets to be “de facto” noncompetes, such as broad confidentiality agreements. See Russell Beck, FTC Should Take Nuanced Approach On Noncompete Regs (July 19, 2021), available at https://www.law360.com/articles/1403765/ftc-should-take-nuanced-approach-on-noncompete-regs.

[21] Even short video trainings can be helpful. See Beck Reed Riden, LLP’s Ten Minute Trade Secret TrainingTM videos, available at https://beckreedriden.com/50-state-noncompete-chart-2/.

Sarah Tishler Featured in Law360 on New Calif. Noncompete Restrictions

Sarah Tishler’s article about California’s latest effort to stamp out noncompete restrictions for its residents was published by Law360 under the title, “Calif. Law Tests Noncompete Prohibitions’ Potential Reach.”

The article, reprinted in full below, analyzes California’s new law expanding the scope of their restrictive covenant ban.

s increasing numbers of states enact laws to protect employees within their boundaries, the question of the reach of those laws — namely, the extent to which they will be enforced in other jurisdictions — is simultaneously becoming increasingly important and increasingly fractured.

Many states have tried to bolster protections for workers through laws that prevent employers from contracting around statutory limitations on post-employment restrictive covenants — in particular, preventing employers from requiring employees to adopt the law of a less protective state as the governing law for an employment agreement containing post-employment restrictive covenants.

There are nine states that have adopted these types of laws: California, Colorado, Louisiana, Massachusetts, Minnesota, Montana, North Dakota, Texas, and Washington.[1]

Michigan appears ready to become the tenth with H.B. 4399, legislation regulating post-employment restrictive covenants, which provides: “All of the following are void and unenforceable: … A choice of law provision in an agreement, to the extent that it would negate the requirements of this section.”

The most recent update to this trend is California’s addition to its Business and Professions Code, Section 16600.5, which was signed into law by Gov. Gavin Newsom on Sept. 1, and takes effect Jan. 1, 2024.

Section 16600 codifies California’s well-known policy prohibiting employee noncompetes: “Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

The new Section 16600.5 states, in relevant part:

  1. Any contract that is void under this chapter is unenforceable regardless of where and when the contract was signed.
  2. An employer or former employer shall not attempt to enforce a contract that is void under this chapter regardless of whether the contract was signed and the employment was maintained outside of California.[2]

here can be no question about the intent of the legislation. The Legislature’s findings in support of the law states in part: “The California courts have been clear that California’s public policy against restraint of trade law trumps other state laws when an employee seeks employment in California, even if the employee had signed the contractual restraint while living outside of California and working for a non-California employer.”

It is clear that California wants no ambiguity surrounding the reach of its restrictive covenant laws — if the employee resides in California, during or after signing a contract containing a provision that violates Section 16600, then California wants to ensure that there is no way the employer can enforce the provision in question.

In other words, it wants every California resident to live, or arrive, in the state free and clear of restraints on their employment.

This legislation has the potential to upend the usual considerations taken into account when negotiating an employment agreement with restrictive covenants. As it stands, many employers include forum selection and governing law clauses in their employment agreements, in an effort to maintain uniformity across their operations.

Up to now, that approach has generally found success in overcoming employees’ attempts at seeking statutory protection under laws like California Labor Code, Section 925, which provides as follows:

  1. An employer shall not require an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would do either of the following:
    1. Require the employee to adjudicate outside of California a claim arising in California.
    2. Deprive the employee of the substantive protection of California law with respect to a controversy arising in California.
  2. Any provision of a contract that violates subdivision (a) is voidable by the employee, and if a provision is rendered void at the request of the employee, the matter shall be adjudicated in California and California law shall govern the dispute.

The substantive legislative intent of Section 925, therefore, is to ensure that California workers enjoy the benefit of Section 16600 regardless of what their contracts say, but that strategy has had mixed results in the courts.

For example, in Ronnoco Coffee LLC v. Castagna, a 2021 decision by the U.S. District Court for the Eastern District of Missouri, one of the defendants was employed by the plaintiff as a territory sales manager in Los Angeles.[3]

The agreement the California defendant signed prohibited him from working for a competitor during and for two years after his employment; prohibited him from soliciting the plaintiff’s employees, clients and customers; and prohibited him from disclosing any confidential and proprietary information.[4]

The agreement also specified that Missouri law governed the agreement and provided for jurisdiction and venue in that forum.[5]

Shortly after signing the agreement, the defendant resigned and began employment with a direct competitor.[6] On a motion to dismiss, the defendant specifically argued that as a California resident, Section 925 of the California Labor Code voided the agreement’s jurisdiction and venue provisions, and argued that California law should apply under conflict of law principles, voiding the restrictive covenants as well.[7]

Rejecting these arguments, the court noted that “district courts outside of California considering choice of law provisions and forum selection clauses have refused to apply § 925 when another state’s law has been chosen by the parties.”[8]

Following the enactment of Section 16600.5, the stakes seem even higher. Now it will not only be California employees attempting to avail themselves of the protections of California’s competition law. It has significantly increased the potential for employees from other states to relocate to California to seek the benefits of Section 16600.5.

Take the hypothetical of a New York company that employs a New York resident. The parties enter into an employment agreement containing a post-employment noncompete, with a choice of law clause selecting New York, and a forum selection clause also selecting New York courts.

The employee resigns, moves to California, and starts working for a direct competitor. The employer wants relief. What can it do?

  • Could the employer sue the former employee in California for breach of the noncompete? This seems like it has a high probability of failure given the explicit language of Section 16600.5; it is even more certain than in the past that a California court would void the noncompete.
  • Could the employer sue the former employee in New York? This seems more promising given New York’s jurisprudence on forum selection clauses.[9] Note that the employer would also have to establish personal jurisdiction over the employee, which is likely, but not necessarily guaranteed despite the existence of the forum selection clause.[10]
  • Could the employer sue the new employer in California under a theory of tortious interference with contract? It seems likely that a California court would hold that there could be no tortious interference with an invalid contractual provision.
  • Could the employer sue the new employer in New York? Establishing personal jurisdiction over a California company with, for argument’s sake, no business in New York would be an uphill battle.

Along with these strategic issues, foundational constitutional questions regarding how other states should treat legislation such as California’s have simultaneously come to the fore.

Earlier this year, a petition to review a decision of the U.S. Court of Appeals for the Eighth Circuit was brought before the U.S. Supreme Court, captioned Traffic Tech Inc. v. C.H. Robinson Worldwide Inc.[11]

In Traffic Tech, five individual defendants, all California citizens, signed employment agreements with C.H. Robinson — a transportation and logistics giant — containing post- employment restrictive covenants, and a choice of law clause selecting Minnesota as the governing law of the agreements.[12]

The restrictive covenants at issue were indisputably illegal under California law, and legal under Minnesota law. Each of the individual defendants resigned from C.H. Robinson, began employment for a competitor, and continued to live and work exclusively in the state of California.[13]

C.H. Robinson sued the individual defendants first in Minnesota state court for breach of contract — specifically, breach of the customer nonsolicitation provision — and the defendants removed the case to the U.S. District Court for the District of Minnesota.[14]

n summary judgment, the defendants argued that the district court should apply California law to the dispute, rendering the restrictive covenants void and unenforceable.[15] After the district court granted summary judgment, C.H. Robinson appealed to the Eighth Circuit, arguing that the district court erred by not applying the usual choice of law test under Minnesota law.

The Eighth Circuit ruled that “Minnesota is committed to the rule that parties can agree on the law that governs their contract … a contractual choice-of-law provision will govern … so long as the parties acted in good faith and without an intent to evade the law,” reversing the district court and determining that Minnesota law applied, without consideration of the impact of California’s laws.[16]

The defendants’ petition for a writ of certiorari side steps the usual choice of law analysis, and goes straight to the question of “the constitutional limitations of the Full Faith and Credit Clause and the Due Process Clause, specifically as it relates to a State’s ability to disregard unwaivable rights of the citizens of another State.”[17]

The petition states: “This Court has not yet set forth how a State should address an applicable Anti-Waiver Statute of a sister State, such as Cal. Labor Code § 925.”[18] It goes on to summarize the “patchwork of conflicting case law” that has grown on this subject without clear guidance from the Supreme Court.[19]

Importantly for California and other states with similar statutes, the petitioners argue that Minnesota’s choice-of-law test, as applied by the Eighth Circuit, is unconstitutional because it exhibits a policy of hostility to the public acts of its sister state, violating the full faith and credit and due process clauses of the Constitution.[20]

However, this is not the end of the story for California’s legislation, specifically the new Section 16600.5. As the petition notes, the court’s existing jurisprudence on the full faith and credit clause and the due process clause with respect to conflicts of law requires that “for a State’s substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair.”[21]

The petition also cites former Justice John Paul Stevens’ 1981 concurrence in Allstate Insurance Co. v. Hague,[22] in which he wrote, “A choice — of — law decision that frustrates the justifiable expectations of the parties can be fundamentally unfair. This desire to prevent unfair surprise to a litigant has been the central concern in this Court’s review of choice — of — law decisions under the Due Process Clause.”[23]

It is difficult to square that precedent, which has not been abrogated since, with the explicit statutory command of Section 16600.5 to disregard where a given contract was signed, when a given contract was signed, and whether the employee lived and worked in California during the relevant time period.

If the touchstone of constitutionality in a conflict-of-laws analysis is fairness, can a statute allowing complete disregard of salient facts related to the dispute survive?

Unfortunately, the Traffic Tech case will not resolve these important constitutional questions, because the Supreme Court denied the writ for certiorari on October 2, 2023. Because the court’s denial did not include any rationale, it is impossible to know why the Supreme Court decided that it did not need to review the case.

Traffic Tech therefore joins the U.S. District Court for the District of New Jersey’s 2020 decision in Howmedica Osteonics Corp. v. DePuy Synthes Sales Inc.[24] and other recent cases touching upon these choice-of-law issues that the Supreme Court has declined to resolve.

These choice-of-law questions therefore remain live and salient for practitioners, employers and employees around the country.

Given the mixed success that California’s worker protections have found in other jurisdictions, particularly when faced with another state’s choice-of-law or venue provision, it is understandable why the California Legislature felt the need to go as far as it has.

Only time will tell, however, whether Section 16600.5 will be considered consistent with the U.S. Constitution, or whether legislators will need to go back to the drawing table to find another way to ensure that California workers receive the benefit of their home state’s laws.


Sarah Tishler is a commercial litigator whose practice focuses on complex business disputes in state and federal courts, including intellectual property, breach of contract, and fraud claims.


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.

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment.

We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.


Footnotes:

  1. See: Cal. Labor Code § 925; Colo. Rev. Stat. Ann. § 8-2-113; La. Stat. Ann. § 23:921; Mass. Gen. Laws Ann. Ch. 149, § 24L; Minn. Stat. § 181.988; Mont. Code Ann. § 28-2-708;N.D. Cent. Code Ann. § 9-08-05; Tex. Bus. & Com. Code Ann. § 15.52.; and Wash. Rev. Code Ann. § 49.62.050.
  2. In addition to these provisions, § 16600.5 also mandates that employers who violate the law commit a civil violation, and affected employees may bring a private action for injunctive relief, the recovery of actual damages, or both.
  3. Ronnoco Coffee LLC v. Castagna, No. 4:21-CV-00071 JAR, 2021 WL 842599, at *1 (E.D. Mo., March 5, 2021).
  4. Id. at *2.
  5. Id. at *5.
  6. Id. at *3.
  7. Id. at *6.
  8. Id. In support, the Ronnoco court cited Howmedica Osteonics Corp. v. Howard, No. CV1919254SDWLDW, 2020 WL 1102494, at *4 (D.N.J. Jan. 17, 2020), report and recommendation adopted, No. 19-19254 (SDW) (LDW), 2020 WL 1082601 (D.N.J. Mar. 5, 2020); Genesys Telecommunications Labs. Inc. v. Morales, No. 119CV00695TWPDML, 2019 WL 5722225, at *7 (S.D. Ind. Nov. 5, 2019); Cherry Creek Mortg. Co. v. Jarboe, No. 18-CV-00462-KLM, 2018 WL 6249887, at *4 (D. Colo. Nov. 29, 2018). While it is accurate that many courts have refused to apply § 925 when another state’s law has been chosen by the parties, the courts are not unanimous. See, e.g., Focus Fin. Partners LLC v. Holsopple, 241 A.3d 784, 821 (Del. Ch. 2020) (applying Delaware conflict of law rules to determine that § 925 governed the case, and therefore invalidated the Delaware forum selection and choice- of-law provisions in the restrictive covenant agreement); C.H. Robinson Worldwide Inc. v. Traffic Tech Inc., No. CV 19-902 (MJD/DTS), 2021 WL 4307012, at *1 (D. Minn. Sept. 22, 2021) (as discussed below, this case was reversed in relevant part by the Eighth Circuit, and is on certiorari before the United States Supreme Court); Oxford Glob. Res. LLC v. Hernandez, 480 Mass. 462, 472 (2018) (affirming order of dismissal for forum non conveniens despite a forum selection clause selecting Massachusetts, because it was contrary to California’s fundamental public policy, and California had a materially greater interest in the dispute).
  9. See Ministers & Missionaries Benefit Bd. v. Snow, 26 N.Y.3d 466, 476 (2015) (holding that “New York courts should not engage in any conflicts analysis where the parties include a choice-of-law provision in their contract”); see also Capstone Logistics Holdings Inc. v. Navarrete, No. 17-CV-4819 (GBD), 2018 WL 6786338, at *20 (S.D.N.Y. Oct. 25, 2018) (“the courts of New York have refused to consider the public policy of foreign states – including California – to overturn an otherwise valid contractual choice of law provision”) (emphasis in original), aff’d and remanded in part, 796 F. App’x 55 (2d Cir. 2020). To further illustrate the disparate approaches taken by different jurisdictions, consider the Georgia Supreme Court’s recent decision in Motorsports of Conyers LLC v. Burbach, where the court clarified that while Georgia courts must generally honor a contractual choice-of-law provision selecting a foreign law, it may not if doing so is “restrained by the General Assembly” or “contrary to the policy or prejudicial to the interests of this state.” 2023 WL 5760197, at *3 (Ga. Sup. Ct. Sept. 6, 2023). Applying this standard, the Motorsports court held that the analysis for foreign choice-of-law provisions with respect to restrictive covenants begins by asking whether the restrictive covenant comports with Georgia’s restrictive covenant statute. Id. at *7. The Motorsports court vacated the judgment, and reversed and remanded the case back to the trial court to apply the standard it articulated. Id. at *8.
  10. While New York state and federal courts apply the general rule that a forum selection clause confers personal jurisdiction over a defendant (see, e.g., D.H. Blair & Co. v.Gottdiener, 462 F.3d 95, 103 (2d Cir. 2006)), they also are exacting in their requirements that a forum selection clause be unambiguous to be enforceable. For example, the Eastern District of New York deemed a forum selection clause ambiguous and unenforceable, and therefore found no personal jurisdiction, when the clause in question provided “This Agreement shall be governed by, construed and enforced, at the sole election of the company at any court.” PowerDsine Inc. v. Broadcom Corp., No. 07CV2490(SJF)(WDW), 2008 WL 268808, at *4 (E.D.N.Y. Jan. 29, 2008) (granting motion to dismiss in part for lack of personal jurisdiction). The court’s close analysis of the contractual language only underscores the importance of a well-drafted forum selection clause.
  11. Petition for Writ of Certiorari, Traffic Tech, Inc. v. C.H. Robinson Worldwide Inc., No. 23- 70 (July 10, 2023) (hereinafter “Petition”).
  12. C.H. Robinson Worldwide Inc. v. Traffic Tech Inc., 60 F.4th 1144, 1146-47 (8th Cir. 2023).
  13. C.H. Robinson Worldwide Inc. v. Traffic Tech Inc., No. CV 19-902 (MJD/DTS), 2021 WL 4307012, at *1 (D. Minn. Sept. 22, 2021), aff’d in part, rev’d in part and remanded, 60 F.4th 1144 (8th Cir. 2023).
  14. Id. at *5.
  15. Id. at *5-10.
  16. C.H. Robinson Worldwide, 60 F.4th at 1148 (internal quotation marks and citation omitted). Note that this case was decided before Minnesota changed its law to (prospectively) prohibit noncompete agreements. See Minn. Stat. § 181.988.
  17. Pet. at 10.
  18. (Pet. at 11.),
  19. See Pet. at 12-13.
  20. Pet. at 19.
  21. Pet. at 19, quotingPhillips Petroleum Co. v. Shutts, 472 U.S. 797, 818 (1985) (internal quotation marks and citation omitted).
  22. 449 U.S. 302 (1981).
  23. Pet. at 24-25, quoting Allstate Ins. Co. v. Hague, 449 U.S. 302, 327 (1981).
  24. Petition for Writ of Certiorari, Howmedica Osteonics Corp. v. DePuy Synthes Sales Inc., No. 22-55126 (Sept. 14, 2022), petition for writ of certiorari denied (Dec. 12, 2022). For further discussion of the Howmedica cases, see Sarah Tishler, Law360, Minn. Noncompete Ban May Add to Nat’l Venue Choice Tangle (July 20, 2023), available at https://www.law360.com/articles/1696897.

Sarah Tishler Featured in Law360 on Noncompete Choice-of-Law and Venue Rules

Sarah Tishler’s article about the challenges presented by choice-of-law and venue provisions in noncompete statutes was published by Law360 under the title, “Minn. Noncompete Ban May Add To Nat’l Venue Choice Tangle.”

The article, reprinted in full below, follows Minnesota’s outright ban on noncompete agreements and focuses on the choice-of-law and venue provision designed to protect Minnesota-based employees.

s of July 1, employee noncompete agreements are no longer valid in the state of Minnesota.

While the law does not apply retroactively to existing employee noncompetes, as of its effective date, Minnesota has joined just three other states — California, North Dakota and Oklahoma — in banning noncompetes entirely.[1]

The outright ban on noncompetes has made headlines for good reason. But also contained in the statute is a significant choice-of-law and venue provision designed to be as protective as possible for Minnesota-based employees.

Subsection 3 of the statute provides that an employer “must not require an employee who primarily resides and works in Minnesota” to agree to a contract — not just noncompetes — that would

  1. require the employee to adjudicate out of Minnesota a claim arising in Minnesota; or
  2. deprive the employee of the substantive protection of Minnesota law with respect to a controversy arising in Minnesota.

Any contractual provision violating the foregoing is “voidable at any time by the employee,” and if such a provision is rendered void, the dispute “shall be adjudicated in Minnesota and Minnesota law shall govern the dispute.”

The subsection also explicitly provides that in addition to injunctive relief and any other remedies, “a court may award an employee who is enforcing rights under this section reasonable attorney fees.”

With this provision, Minnesota joins at least California, Colorado, Louisiana and Washington in providing explicit statutory choice-of-law and venue rules for state resident employees.[2]

With the passage of this law, Minnesota will consider any noncompete agreement signed after July 1 to be voidable by the employee if the agreement requires the employee to adjudicate a dispute outside of Minnesota or deprives the employee of “the substantive protection of Minnesota law,” i.e., the new ban against noncompetes. The Minnesota law goes further than some other states, however, by providing in the statute itself reasonable attorney fees for any employee enforcing rights under that section.

he clear intent of the statute is to prevent employers from avoiding the new ban against noncompetes by inserting another state’s law and venue into contractual choice-of-law and venue provisions. Nonetheless, this type of statutory protection has received entirely mixed treatment in the courts when judges are confronted with the inevitable — and messy — question of whether state or federal law governs the validity, and enforcement, of forum selection clauses in diversity cases.

Of course, that fact pattern is precisely how the question presents itself in the first place.

To offer one example: An employee from Massachusetts, California or Minnesota signs an employment agreement with a company containing a forum selection clause choosing New Jersey. That employee quits and begins working for a competitor in direct violation of the employment agreement. Where will the parties be ordered to litigate?

In Depuy Synthes Sales, Inc. v. Howmedica Osteonics Corp. in March 2022, the U.S. Court of Appeals for the Ninth Circuit said that, in this exact scenario, state law decides the validity of a forum selection clause and choice-of-law and venue clause, and therefore the noncompete clause was void under California Labor Code, Section 925.[3]

In contrast, in Howmedica Osteonics Corp. v. Howard in 2020, the U.S. District Court for the District of New Jersey had come to the polar opposite conclusion under the same forum selection clause in the same employment contract, rejecting arguments that Section 925 invalidated it.[4]

The lack of uniformity persists in other jurisdictions that have considered the same issue.[5] In the related areas of venue transfer and forum non conveniens, similar issues appear.

While some jurisdictions consider the existence of a state forum selection statute to be evidence of the state’s strong public policy, other jurisdictions merely shrug. In support of the former, in AG Resource Holdings LLC v. Terral, the Delaware Chancery Court held in 2021:

The Louisiana [forum selection] laws cited above are clear pronouncements by the Louisiana legislature regarding its public policy on matters of employment and competition. Under the circumstances, Louisiana’s interests must be respected and enforced.[6]

On the other end of the spectrum, in Hilb Group of New England LLC v. LePage, the U.S. District Court for the Eastern District of Virginia in May 2022 wrote:

No Massachusetts court has held that the [Massachusetts Noncompetition Agreement Act, which mandates that all cases involving Massachusetts residents must take place in Massachusetts] manifests the state’s strong public policy. Thus, the enforcement of the Agreement’s forum selection clause would not go against a strong public policy of Massachusetts.[7]

A clear path out of this jumble of precedent appears unlikely. In late 2022, the U.S. Supreme Court denied certiorari in the Howmedica case from the Ninth Circuit, leaving the circuits to go their own way.

As more states seek to ensure that their residents are indeed protected by the state laws that pass their legislatures, employers operating in multiple states and employers with remote work forces must proceed with caution and stay abreast of the rapid changes to state laws.

Otherwise, the law chosen in a given noncompete or employment agreement may not be the law eventually applied by a court — sometimes with dramatic results.


Sarah Tishler is a commercial litigator whose practice focuses on complex business disputes in state and federal courts, including intellectual property, breach of contract, and fraud claims.


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.

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment.

We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.


Footnotes:

  1. Stay tuned for what New York Gov. Kathy Hochul will do with Bill No. S3100A, the bill passed by the New York State Senate and Assembly that would ban all noncompetes.
  2. See, e.g., Massachusetts Noncompetition Agreement Act, M.G.L. 149 § 24L(e)-(f):
    1. No choice of law provision that would have the effect of avoiding the requirements of this section will be enforceable if the employee is, and has been for at least 30 days immediately preceding his or her cessation of employment, a resident of or employed in Massachusetts at the time of his or her termination of employment.
    2. All civil actions relating to employee noncompetition agreements subject to this section shall be brought in the county where the employee resides or, if mutually agreed upon by the employer and employee, in Suffolk county; provided that, in any such action brought in Suffolk county, the superior court or the business litigation session of the superior court shall have exclusive jurisdiction.
  3. Depuy Synthes Sales, Inc. v. Howmedica Osteonics Corp., 28 F.4th 956 (9th Cir. 2022).
  4. Howmedica Osteonics Corp. v. Howard, 2020 WL 1102494, at *3 (D.N.J. Jan. 17, 2020), report and recommendation adopted, 2020 WL 1082601, at *1 (D.N.J. Mar. 5, 2020).
  5. See, e.g., Terral v. AG Res. Holdings LLC, 54,156 (La. App. 2 Cir. 3/9/22), 335 So. 3d 1009, 1016-17 (invalidating Delaware choice-of-law provision in favor of Louisiana statute); Zeppelin Systems USA Inc. v. Pyrolyx USA Indiana LLC, 2020 WL 1082774, at *4 (S.D.N.Y. Mar. 5, 2020) (upholding validity of forum-selection clause under federal law, despite an Indiana law that would render the clause invalid); NuMSP LLC v. St. Etienne, 462 F. Supp. 3d 330, 345 (S.D.N.Y. May 22, 2020) (“in determining whether a forum selection provision is invalid, the Court focuses on the public policy of the forum state, not some other state”).
  6. AG Resource Holdings LLC v. Terral, No. CV 2020-0850-JRS, 2021 WL 486831, at *5 (Del. Ch. Feb. 10, 2021).
  7. Hilb Group of New England LLC v. LePage, No. 3:21-cv-757, 2022 WL 1538583, at *4 (E.D. Va. May 16, 2022).

Russell Beck Featured in Bloomberg Law on Noncompete Agreements

Russell Beck was quoted in a Bloomberg Law article about state and federal efforts to ban noncompete agreements.

The story is titled “States Add to ‘Fire Hose’ of Noncompete Issues Vexing Employers.” The June 13, 2023, article was written by Chris Marr, who writes about labor & employment news for Bloomberg Law.

The article discusses growing support in state legislatures and in the federal government to restrict or ban the use of noncompete agreements. The article discusses Minnesota’s recent noncompete ban and the proposed rule issued by the Federal Trade Commission that would essentially forbid noncompete agreements.

The article quotes Russell as follows:

Employers nationwide, but especially in states enacting strong restrictions, need to think carefully about when and why they’ve used noncompetes historically and consider alternative strategies going forward, said Russell Beck, an attorney at Beck Reed Riden LLP in Boston.

“Typically what they’re trying to protect is their information including trade secrets and confidential information, as well as their relationships with the customers,” he said.

Other ways to protect those assets include strengthening physical and electronic security for confidential data, training employees on their obligations, and improving processes for reinforcing customer relationships immediately after a key employee leaves, according to Beck.

Some companies also have begun to use notice requirements in place of noncompetes, he said. For example, a company might require an employee to give a 30- or 60-day notice before leaving, and the business could opt to keep them on the job or else pay them to stay home for that time period while the company takes steps to secure customer relationships that might be affected—a version of the garden leave concept that’s common in UK employment contracts.

Since the article was published, the state of New York has inched closer to a complete noncompete ban.


Russell frequently writes about current efforts to regulate noncompete agreements. He was featured on NPR and quoted in the New York Times discussing federal regulatory efforts targeting noncompete agreements. In January 2023, Russell wrote an article for Law360 called “Companies Must Brace For FTC’s Overbroad Noncompete Rule.” 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.

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 years of experience 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.”

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment.

We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Russell Beck Featured in Bloomberg Law on Noncompete Agreements

Russell Beck was quoted in a Bloomberg Law article about the FTC’s proposal to ban noncompete agreements.

The story is titled “FTC’s Noncompete Ban Mirrors State Proposals Before Scaling Back.” The January 9, 2023, article was written by Chris Marr, who writes about labor & employment news for Bloomberg Law.

The article discusses the proposed rule recently issued by the Federal Trade Commission that would essentially ban noncompete agreements.

The article quotes Russell as follows:

“I expect that the FTC will pare back the proposed rule to make it address the abuses,” which include “using them for low-wage workers, using overly-broad noncompetes, and disclosing the requirement of a noncompete the day the employee shows up for work,” said Russell Beck, an employment lawyer with Beck Reed Riden LLP in Boston.

The FTC rule is widely expected to face legal challenges, as many lawyers and business interests such as the US Chamber of Commerce question whether Congress delegated such broad rulemaking authority to the commission.

“Even though the FTC likely doesn’t have authority to issue any rule on employee noncompetes outside of mergers, I think if they create a narrow rule, it will be far less likely to be challenged,” Beck said.

____

Russell frequently writes about current efforts to regulate noncompete agreements. He was featured on NPR and quoted in the New York Times discussing federal regulatory efforts targeting noncompete agreements. In January 2023, Russell wrote an article for Law360 called “Companies Must Brace For FTC’s Overbroad Noncompete Rule.” 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.

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 years of experience 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.”

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment.

We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Russell Beck Featured in Bloomberg Law on Noncompete Agreements

Russell Beck was quoted in a Bloomberg Law article about legislation in New Jersey that would require garden leave benefits in noncompete agreements.

The story is titled “N.J. Noncompete Proposal Would Make Post-Employment Pay the Norm.” The September 9, 2022, article was written by Chris Marr, who writes about labor & employment news for Bloomberg Law.

The article discusses legislation in New Jersey governing noncompete agreements that would “require full pay plus benefits for former employees whenever a noncompete or other restrictive covenant is in effect.”

The article quotes Russell as follows:

“The payment of money unquestionably makes it easier to enforce a noncompete,” said Russell Beck, an employment lawyer with Beck Reed Riden LLP in Boston.

As scrutiny of employee noncompete agreements spreads among state legislatures and courts, Beck said he’s seen a small uptick in companies opting to include garden leave in their agreements without a legal mandate for it, particularly in the financial services industry.

Russell explains the origins of the the term “garden leave” as follows:

Although often used in the US to refer to noncompetes, the term “garden leave” originated with a different kind of post-employment pay, Beck said. Employees in the UK often are contractually obligated to give a notice period before leaving their job. If the employer doesn’t want the employee on site after they’ve given notice, “the company will pay you to sit in your garden” instead, he said.

____

Russell frequently writes about current legislative efforts to regulate noncompete agreements. He was featured on NPR and quoted in the New York Times discussing federal regulatory efforts targeting noncompete agreements. 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.

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 years of experience 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.”

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment.

We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Russell Beck Featured in Bloomberg Law on Noncompete Agreements

Russell Beck was quoted in a Bloomberg Law article about recent state initiatives to regulate the use of noncompete agreements for low-wage workers.

The story is titled “Red State Lawmakers Look at Noncompete Bans for Low-Wage Workers.” The February 9, 2022, article was written by Chris Marr, who writes about labor & employment news for Bloomberg Law.

The article discusses recent legislative efforts in several states to regulate or prohibit the use of non-competition agreements for lower-wage and hourly workers.

The article quotes Russell as follows:

Research suggests 18% of the U.S. workforce is bound by a noncompete, and 38% of workers have signed one previously.

How often employers attempt to enforce noncompetes against low-wage workers is difficult to measure, said Russell Beck, attorney at Beck Reed Riden LLP in Boston, whose practice focuses largely on employment covenants. Enforcement sometimes happens through civil litigation, but can also take the form of a verbal reminder or a cease-and-desist letter to the employee, he said.

“There are a lot of low-wage workers bound by noncompetes and complying with them, even when they might not in fact be enforceable,” Beck said.

Russell explains that the recent legislative activity at the state level mirrors federal efforts to regulate noncompete agreements:

The state legislative activity also comes as the Federal Trade Commission considers nationwide regulation to limit noncompetes—a process still in the research stage, Beck said. President Joe Biden called on the FTC last July to ban or limit employee noncompetes as part of a sweeping executive order aimed at improving competition in the economy.

In the article, Russell also addresses the national influence of model legislation to reform noncompete agreements that was published last year by the non-partisan Uniform Law Commission:

Release of the commission’s model should help motivate more states to establish clear standards for enforceability of noncompetes, as well as similar covenants such as nonsolicitation agreements, said Beck, who helped write that sample bill.

Business groups have an incentive to want clear, uniform standards, he said, since now many states’ courts determine whether noncompetes are enforceable on a case-by-case basis relying on common law. But don’t expect a rush of states suddenly all adopting the model language, he added.

“It won’t be overnight. It will take years” to potentially get to a majority of states adopting some version of the model, Beck said. “States are really taking a careful look at their current laws.”

Russell notes that the jury is still out as to whether regulations to limit enforcement of noncompete agreements has any measurable, positive impact on wages and other economic activity:

The success of existing state laws at preventing overuse or abuse of employee noncompetes is tough to measure, Beck and Farley each said.

Research into Oregon’s ban on noncompetes for low-wage workers—published by University of Maryland Professor Evan Starr and FTC Economist Michael Lipsitz—found the law might have helped produce a small boost to wage growth and job mobility. But Beck noted it’s hard to be sure whether the noncompete law was the main cause of those economic impacts.

____

Russell frequently writes about current legislative efforts to regulate noncompete agreements. He was featured on NPR and quoted in the New York Times discussing federal regulatory efforts targeting noncompete agreements. 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.

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 years of experience 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.”

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment.

We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

Russell Beck Featured in Law360 on FTC Noncompete Regulation Efforts

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.”

Russell writes:

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 years of experience 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.”

Beck Reed Riden LLP is Boston’s innovative litigation boutique. Our lawyers have years of experience working with clients ranging from Fortune 500 companies to start-ups and individuals. We focus on business litigation and employment.

We are experienced litigators and counselors, helping our clients as business partners to resolve issues and develop strategies that best meet our clients’ legal and business needs – before, during, and after litigation. We’re ready to roll up our sleeves and help you. Read more about us, the types of matters we handle, and what we can do for you here.

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