Russell Beck and Erika Hahn‘s article on President Biden’s proposal to ban most noncompete agreements was published by Law360 under the title, “3 Ways to Plan for a Possible Federal Ban on Noncompetes.”
Their analysis begins with an overview of current federal initiatives to restrict or eliminate the use of noncompete agreements. Russell and Erika explain that, although these initiatives “are presumably well-intended, they typically rely on nascent, nuanced, inconclusive, and sometimes inconsistent research and reflexively draw misplaced causal inferences.”
According to their article, “now is the time to review and update your overall legitimate business interest protection strategy.”
Given the uncertainty around the future of noncompete agreements, Russell and Erika provide practical steps companies should consider to protect their business interests whether or not noncompete covenants are barred. These steps include consideration of the following employee agreements:
- Narrowly-tailored noncompete agreements
- Nondisclosure agreements
- Nonsolicitation, noninterference and no-service agreements
- No-recruit, no-raid and no-hire agreements
- Invention assignment agreements
- Springing (or “time out”) noncompetes
In their article, Russell and Erika observe that “even if noncompetes are banned, similar restrictions may survive (to the extent permitted by state law),” including the following:
- Traditional garden leave/notice covenants: Through these agreements, employee are required to provide notice of resignation for a specified (typically, lengthy) period, during which they remain employed by their soon-to-be-former employer (but do no work) and, as a consequence, remain bound by their fiduciary duties (including to not compete).
- Forfeiture-for-competition agreements and compensation-for-competition agreements: These are agreements by which an employee either forfeits certain benefits or pays some amount of money (often a percentage of revenues) if they engage in activities that are competitive with their former employer.
- Compensation-for-noncompetition-choice agreements: These agreements provide for a payment (money, stock options, profit sharing or other consideration) to an employee who voluntarily chooses to refrain from competing. Unlike a forfeiture-for-competition provision (which is often considered a noncompete), nothing is forfeited. Instead, if they choose to refrain from competing, they receive compensation to which they otherwise would not have been entitled.
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 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 five years 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 (5th ed., MCLE, Inc. 2015), 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 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 and 850 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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