Non-compete agreements prevent employees from working for an employer’s competition in a given area and time. In January, the Federal Trade Commission (FTC) unveiled a rule that may prevent companies from using these agreements to limit their employees’ ability to work for a rival. https://kingstonlawgroup.com/will-there-be-a-federal-ban-on-non-compete-agreements/

1. “Insert Article
Title”
“Will There Be a Federal Ban on Non-
Compete Agreements?

2.  How Can a Non-Compete Agreement Impact
Me?
 Are Non-Competes Legal Under State Law?
 Does a Non-Compete Clause Bind Me Because
It’s in a Contract I Signed?
 How Do Non-Competes Impact the Economy?
 What’s the Process to Make This Proposal
Binding?

3. ● Non-compete agreements prevent
employees from working for an employer’s
competition in a given area and time.
● In January, the Federal Trade Commission
(FTC) unveiled a rule that may prevent
companies from using these agreements to
limit their employees’ ability to work for a
rival.

4. How Can a Non-Compete Agreement Impact Me?
● These agreements restrict the number of potential
employers a person may have, which can limit their
chances for another job with higher pay and better
benefits.
● This contractual language was first used with high-
salaried executives, but even college interns and
people employed to make sandwiches and deliver
them have been subject to non-compete
agreements.
● A non-compete agreement restricts your rights. If
you agree to one, you may be hired for the new job,
but it may severely limit your ability to get a better
one in the future.

5. Are Non-Competes Legal Under State Law?
● About half of the states significantly restrict non-
competes, and a small number (California, North Dakota,
and Oklahoma) have made them illegal.
● A New Jersey court will decide if a non-compete is
enforceable depending on:
 Whether the employer is protecting a legitimate
business interest
 It’s not an undue burden on the employee
 It doesn’t harm the public
 It’s not overbroad in time or geography

6. ● There’s nothing to prevent an employer from
including in a contract unenforceable non-
compete language.
● It’s up to the employee to have an attorney
review the contract to find out what parts are
invalid.
● Employees unfamiliar with the law or not hiring
legal help may wrongly assume a contract
provision is valid and act like it’s binding on them
when it’s not.
Does a Non-Compete Clause Bind Me
Because It’s in a Contract I Signed?

7. ● If put into effect, the FTC proposal would try to
counteract this by requiring employers to
withdraw current non-compete language and
inform workers they no longer apply.
● It would also be illegal for an employer to agree
to a non-compete with an employee, or suggest
to a worker they’re bound by a non-compete
when they’re not.

8. How Do Non-Competes Impact the
Economy?
● Supporters of non-compete agreements claim
employers won’t invest as much into employees if
they might work for a competitor.
● One way to address this is contract language
requiring a former employee to refrain from
discussing the ex-employer’s trade secrets,
intellectual property, or confidential information
(a confidentiality agreement).

9. ● On the other hand, employee advocates say that
companies should be required to pay employees
who have to sit out their non-compete term.
● If their non-competition is so important, say
these advocates, then the companies should be
willing to pay their former employees for their
time away from the competitive marketplace.

10. ● The FTC announced a 60-day period where
interested parties can comment on the
proposal, which runs out on March 20.
● After the comment period, the FTC may move
to make it final or change its language.
● The rule could take effect 180 days after the
final version is published, but it could be tied
up in legal challenges by employers and
industry groups for months, if not years.
What’s the Process to Make This Proposal
Binding?

11. “Insert Article
Title”
Schedule a Consultation
(609) 683-7400
KingstonLawGroup.com
If you have questions about contract language you’ve already signed, or
because your employer wants you to consent to a non-compete
agreement