The Federal Trade Commission proposed a rule in January that would keep employees free from noncompete agreements nationwide.
States are targeting noncompetes as well. Here are seven:
On Sept. 1, Gov. Gavin Newsom signed a bill prohibiting employers from entering into noncompetes with California employees, regardless of the state the employee is working in. Additionally, on Oct. 13, he signed a bill requiring employers to notify current and former employees about unlawful noncompete covenants in their employment agreements.
In July, Gov. Ned Lamont signed into law an act that amends the state's noncompete law for physicians and adds restrictions. Now, physician noncompete agreements entered into or amended on or after July 1, 2016, may last no longer than a year or extend beyond a 15-mile radius from the physician's primary site of practice.
As of July 1, noncompetes are no longer enforceable for primary care physicians and must include a buyout option for a physician. Noncompetes could be considered unenforceable under certain circumstances of the termination, such as if the physician was fired "without cause," the physician terminates their own employment "for cause," or if the physician's contract has expired and both the physician and employer have fulfilled their respective obligations of the contract.
As of Oct. 1, Maryland employers are barred from noncompete provisions for employees who earn equal to or less than 150 percent of the state's minimum wage.
Legislation pending in the state Legislature would statutorily limit noncompetes to one year and limit the scope to the state's borders. Under the proposed legislation, employers would be required to pay an employee 100 percent of the employee's pay and benefits for the length of the noncompete.
The state Legislature passed a bill in June aiming to stop employers from entering into noncompete agreements with their employees. If Gov. Kathy Hochul signs the bill into law, any noncompete agreement entered or modified 30 days after the signature will be void.
Although unlikely to become a law, a bill has been introduced in the state Legislature that would ban most noncompete agreements. The bill would allow employers to use nondisclosure agreements and restrict customer lists and intellectual property, and would also distinguish between restrictions imposed during employment versus after an employee has left.