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Non-Compete Changes to Expect Under an Anticipated Biden Administration


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11/13/2020
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For the first time in my career, I feel compelled to issue a disclaimer before simply providing some solid legal information. And that's not just sad; it's disheartening. I am a bit concerned that the title of this article alone may offend people, which is not - and never is - my intention.

Over the years I have tried, to the best of my ability, to remain apolitical in my professional, and even personal, capacity; I just don't see any upside to engaging in that banter, particularly because over the last number of years, the policitcal atmosphere has become so toxic (and yes, that applies to both sides of the aisle).

Regardless of anyone's personal feelings on the issue, as things currently stand, it looks like President Trump's legal challenges to the 2020 election will fall short, and Joe Biden will be the next President of the United States. And that prospect carries some very real potential issues for employers and employees alike in the non-compete arena. 

I recognize that some readers of this article may be offended by that, and that's their prerogative. But it doesn't change these facts.

Assuming you can handle everything I've said thus far, here goes:

Non-Compete Changes to Expect Under an Anticipated Biden Administration

At Joe Biden's website, JoeBiden.com, he has made clear his intention to clamp down on restrictive covenants, citing a 2015 study for the proposition that "[A]t some point in their careers, 40% of American workers have been subject to non-compete clauses, and that if workers had the freedom to move to another job, they could expect to earn 5% to 10% more," and that "[a]s president, Biden will work with Congress to eliminate all non-compete agreements, except the very few that are absolutely necessary to protect a narrowly defined category of trade secrets, and outright ban all no-poaching agreements."

Now, you may be wondering what the Biden campaign means by "no-poaching agreements," and you wouldn't be alone; it's really not clear from this statement. After all, it could refer to non-solicitation of a (now former) employer's clients, which is often referred to as "poaching," or, it could simply refer to a ban on soliciting fellow employees to depart the business in droves.

Thankfully, the preceding sentence to the proposed no-poaching ban seems to provide a narrow context for this proposed ban (although it does not remain entirely clear), stating: "[T]hese employer-driven barriers to competition are even imposed within the same company’s franchisee networks. For example, large franchisors like Jiffy Lube have no-poaching policies preventing any of their franchisees from hiring workers from another franchisee."

The Challenges an Anticipated Biden Administration Will Face in Changing Non-Compete Law

Putting aside the obvious - i.e., that Congress remains heavily Republican in nature that tends to side more with the businesses moreso than employees - a Biden adminstration would still face significant hurdles in effecting any material change to non-compete laws because these laws have been traditionally handled at the individual State, rather than Federal level, making it even harder to push a sweeping change.

Nevertheless, employers in particular would be well-advised to read the writing on the wall, and plan accordingly to make sure they aren't left with a host of restrictive covenants that may be deemed unenforceable as a matter of law.

 

 



Category: Non-Compete & Employment Agreements

Jonathan Cooper
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Non-Compete, Trade Secret and School Negligence Lawyer

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