How States Other Than New York Are Treating Non-Compete Agreements
So, you think your non-compete agreement with your "key" employee immunizes you from his ability to leave and compete with your business?
Here's a bit of advice, which is adapted from an article published last week in Marketwatch: Don't be too sure.
True, most states in the country will still enforce non-compete agreements. But there is an increasing number and trend of states that, in response to perceived overreaching by employers, have introduced new and more restrictive regulations imposing limitations on non-compete agreements. For example, New Jersey legislators have now proposed a bill that would render non-compete agreements inherently unenforceable against workers that would otherwise qualify to receive unemployment.
Similarly, Virginia, Massachusetts and Minnesota have proposed laws curtailing non-compete clauses, and an Illinois appellate court recently ruled that a non-compete cannot be enforced against a former employee that worked for a company for under two years.
"Why would the states do this?" you ask.
Because there is a growing body of literature suggesting that non-competes are inherently bad for the economy, as they not only hinder competition, but inhibit those individuals from maximizing the income they can earn from their unique blend of talents.