Welcome Back Non-Compete Contracts

For much of the past year, nearly one in five of all employees in the United States have been waiting for September 4.

That was the day the Federal Trade Commission set to ban most non-compete contracts between employees and their employers.

Due to a recent judicial ruling, the wait for a non-compete contracts ban will take significantly longer, if it happens at all.

On August 21, a federal court in Texas ruled the FTC does not have the authority to make sweeping bans on any business practice nationwide and has halted the FTC’s new regulation from taking effect.

What that means is that for the foreseeable future, employees and employers should continue as they have been for years, looking at non-competes on a case-by-case basis.

And both groups should not presume this will change anytime soon.

The Orlando Law Group wrote about the possible impacts of this rule last November, warning businesses about the ban when the final ruling was announced. With the recent news, it is still high time to review your non-compete contracts.

How did we get here?

Under most non-compete contracts, an employee is not able to work for a competitor for a specified period, many times several years. If the employee decides to work for a competitor, they will be required to pay back any severance and, perhaps, pay damages.

For many employees, it was not a negotiated contract, but something that was required – basically a “sign this if you want to work here.”

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