Russell Beck and Sarah Tishler’s article about the FTC’s proposed nationwide rule banning non-compete agreements was recently published by the Boston Bar Journal.
The article, titled “The FTC New Proposed Rule on Non-Competes,” explores the arguments for and against adopting the FTC’s proposed nationwide ban on noncompetes. The article is presented in a point / counterpoint format, with Russell and Sarah’s article providing the perspective against the proposed rule, and Spencer Thompson and Patricia Washienko of Washienko Law Group, LLC, writing in support of the proposed rule.
For context, the FTC’s proposed rule provides:
“It is an unfair method of competition for an employer to enter into or attempt to enter into a non-compete clause with a worker; maintain with a worker a non-compete clause; or represent to a worker that the worker is subject to a non-compete clause where the employer has no good faith basis to believe that the worker is subject to an enforceable non-compete clause.”
Moreover, the proposed rule sets forth a proposed “functional test” for defining what qualifies as a non-compete. That test would consider a contractual term to be
“a de facto non-compete clause because it has the effect of prohibiting the worker from seeking or accepting employment with a person or operating a business after the conclusion of the worker’s employment with the employer.”
s Russell and Sarah explore in the article, this statutory language and accompanying test is so broad that virtually any restrictive covenant – including nondisclosure agreements, nonsolicitation agreements, and no-service agreements – could be rendered invalid. The proposed rule carries with it numerous unintended and detrimental consequences, does not further the FTC’s stated goals, and deprives the states of the ability to tailor noncompete legislation to the economic and labor practicalities of their workforce.
Russell and Sarah explain that the
the Proposed Rule would bring to a screeching halt the state-level activity on non-competes, depriving the states of their function as the laboratories of democracy (to paraphrase Justice Brandeis). In the last decade alone, nearly two-thirds of U.S. states have made changes to their laws on non-competes. State legislatures are able to tinker with the specific policies that work best for their unique economic environments; a policy that may work well in Boston may not be the right fit for Bangor.
The Boston Bar Journal is a peer-reviewed, online publication of the Boston Bar Association. It presents timely information, analysis, and opinions to more than 10,000 lawyers in nearly every practice area. The Boston Bar Journal is governed by a volunteer Board of Editors dedicated to publishing outstanding articles that reflect their authors’ independent thought.
For up-to-the-minute analysis of legal issues concerning 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.”
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