On May 2, 2022, the New Jersey State Assembly introduced Assembly Bill (AB) 3715 that, if enacted, would significantly limit the use and enforceability of certain restrictive covenant provisions, while mandating additional procedural requirements. AB 3715 is similar to prior bills introduced in the New Jersey legislature in recent years, and part of the ongoing

In MetroHealth Sys. v. Khandelwal, 2022-Ohio-77, Ohio’s Eighth District Court of Appeals affirmed a trial court’s modification of a noncompete agreement between a hospital and a physician formerly employed by the hospital. Both courts reasoned that modifying the agreement, rather than striking it, protected the hospital’s interest.

The disputed noncompete agreement provided that the

New Jersey may be next up to join the growing number of states that significantly restrict the use of non-competition agreements in employment.  As we discussed back in December 2017, a bill proposed in New Jersey at the time, Senate Bill 3518, would “impose significant restrictions and limitations” on the use of restrictive covenants

Texas courts are increasingly encountering efforts to challenge restrictive covenant agreements on free speech grounds, where the restricted activity includes business-related communications. A recent Texas appellate court decision indicates that this strategy has its limits.

In Hieber v. Percheron Holdings, LLC, No. 14-19-00505-CV (Tex. App.—Houston [14th Dist.] Nov. 14, 2019), Percheron Holdings, LLC (“Percheron”)

On November 14, 2019, the U.S. Senate Committee on Small Business and Entrepreneurship held a hearing to examine recently proposed bills that would regulate non-compete agreements at the federal level. Discussion during the hearing indicates that it may have the necessary support to move forward.

Pending Non-Compete Legislation

On October 15, 2019, Senators Chris Murphy

On August 26, 2019, the Delaware Chancery Court invalidated a California employee’s customer and employee non-solicitation covenant on the grounds that it violated California law. In doing so, the Court rejected the plaintiff company’s attempt to override California law by including a Delaware choice of law provision in the underlying agreement.

Background

We initially reported

On May 8, 2019, Washington Governor Jay Inslee signed into law HB 1450, described as “AN ACT Relating to restraints, including noncompetition covenants, on persons engaging in lawful professions, trades, or businesses[.]”  While the Act does not take effect until January 1, 2020, its restrictions apply retroactively to existing agreements signed before that date.

Last year, Democrats in the United States Senate and House of Representatives introduced bills — S.2782  and H.R.5631 — banning non-compete agreements in the vast majority of workplaces across the country. Although those bills failed to gain traction, the authors of this Blog anticipated a renewed effort at federal non-compete reform in 2019, with Democrats

When implementing restrictive covenant agreements in their workforces, companies often grapple with how best to handle the wide variation in the law from one state to the other. One solution is to include a choice of law provision that calls for all agreements to be construed under the laws of a single state. Still, there