What Will Happen if Non-Competes Are Banned?

Non-compete agreements have been in place in certain industries for a long time. These contracts are drafted by employers to limit an employee’s actions after they leave a position. Typically, a noncompete agreement prohibits you from working for a competitor until a set period has passed, but it may also ban you from starting your own company in the same industry, using skills you learned on the job, and contacting former customers.

While employers love non-compete agreements, they are a real headache for employees, since these contracts limit their future employment opportunities. For those who have negative feelings about non-competes, the good news is that they may be banned soon.

But of course there is some drama. In April, the Federal Trade Commission (FTC) approved the rule banning non-competes. The rule was scheduled to go into effect September 4, but the U.S. Chamber of Commerce has filed a lawsuit appealing the decision. It is possible that the fight could go all the way to the U.S. Supreme Court.

The ban could upend how Florida businesses hire and retain employees. The new rule would eliminate existing non-competes except for senior executives who make more than $151,000 a year. Employers would not be allowed to enter new non-competes with senior executives. Non-solicitation agreements and non-disclosure agreements would still be allowed.

According to the FTC, eliminating non-competes would add 8,500 new businesses to the economy every year. Florida is known as the most favorable state in the country for restrictive covenant agreements, so it would have a significant effect on employers in the state.

Close to 18% of the U.S. workforce signs non-competes. Non-competes are not just in the IT industries. They are popular in medical and sales jobs as well. Hair salons, architects, journalists, and even fast-food workers are subject to them as well. Attorneys are exempt from non-competes.

The medical field is one of the largest that requires non-compete agreements. In 2019, Florida legislators passed a law that exempts certain healthcare specialists from these contracts. The Florida Legislature recently ignored a bill that would have eliminated non-competes for all doctors. Lee Health, a large healthcare system in Florida, is reviewing various non-competes and working with experts to determine how the ruling may apply.

In any case, the changes in non-compete agreement laws will affect the way employers hire.

They may attempt to find workarounds and be more careful in protecting confidential information.

Contact a Business Litigation Lawyer Today

Many companies rely on non-compete agreements to manage employees. The ban would be frustrating for employers but better for employees, who often get shafted by these agreements.

When it comes to owning a business, there is no way to escape conflict. When disputes arise, a Bradenton business litigation lawyer from Cahall Law Firm can assist you. We have represented both plaintiffs and defendants in business litigation. Schedule a consultation today by filling out the online form or calling (941) 281-2019.

Source:

naples.floridaweekly.com/articles/rethinking-employment/