Russell Beck and Erika Hahn Featured in Law360 on FTC Regulation of Noncompete Agreements

Russell Beck and Erika Hahn‘s response to the Federal Trade Commission’s investigation whether it should regulate noncompete agreements was published by Law360 under the title, “FTC Should Leave Regulation of Noncompetes to States.”

Russell’s response to the FTC’s inquiry can also be found at Fair Competition Law as “FTC Noncompete Workshop – Update on Our Submission.”

The analysis reflects the testimony submitted by 22 lawyers from around the country (including Russell Beck) to the FTC.  In sum, the testimony asserts that

noncompetes have been regulated by the states for over 200 years, and all 50 states have made policy decisions that make sense for their citizens and their economies. In more than 30 of those states, legislatures have recently been reevaluating their law, with different outcomes that balance competing interests in a way that reflects the economic realities of the particular state.

Nevertheless, in no state does the law permit unfettered use of noncompetes, nor has any state banned noncompetes wholesale since 1890. Rather, each of the 47 states permitting noncompetes allows them to be used, to a greater or lesser extent, only as necessary to protect companies from certain types of unfair competition.

Russell and Erika’s article further contends that the FTC should refrain from regulating noncompete agreements, as follows:

The FTC should not use its rulemaking authority to address noncompete clauses. Rather, the states should be left to evaluate and regulate their own economies as they see fit — as they have done for over 200 years. There is no gap to fill. All 50 states have made policy choices — and more than 30 of them have recently or are currently reevaluating those choices, choosing outcomes that make sense for their unique circumstances.

To the extent that the FTC has authority to promulgate a rule and chooses to exercise it, the FTC should be judicious. Before considering any regulatory action, it is important to understand the potential unintended consequences of significant changes in the law, including, for example, significantly increasing the likelihood that trade secrets will be unlawfully taken to a competitor and increasing the volume of more costly trade secret litigation.

The article concludes that,

While the laws are certainly in a state of flux and should remain the purview of the states, any changes should be made only with a proper factual basis — not on misplaced assumptions.

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.

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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 twenty four years of 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 (5th ed., MCLE, Inc. 2015), used by other lawyers to help them with their noncompete matters
  • 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 administrating the award-winning blog, Fair Competition Law
  • Establishing and administrating the Noncompete Lawyers and Trade Secret Protection groups on LinkedIn, with over 1,600 members 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 2019 Chambers USA Guide, which stated that Russell Beck is a “terrific” attorney, who “is an excellent choice of counsel regarding noncompete agreements and the resolution of restrictive covenant disputes.” 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.