Your Non-Competes Just Got Weaker In Some Places

The courts in two states decided cases recently, weakening non-compete clauses, while in Oklahoma, a new law takes effect Nov. 1 that for the first time allows employers some flexibility in stopping departing workers from taking their co-workers with them.

In New Hampshire, a judge ruled against an employer in a case involving an independent contractor who opened his own fitness facility, taking with him three fellow trainers and some clients. The employer sued, asking for an injunction, submitting the non-compete agreement the trainer signed.

The judge ruled against the former employer, saying non-competes involving independent contractors are different than those among employees. Contractors, the court said, ”have less access to legitimately confidential information of their employers” than do employees. And the relationship is significantly different than that of employer-employee.

In Illinois, an appellate court has decided that for a restrictive employment covenant to be enforceable, the worker must first be on the job for at least two years. Unless and until the state’s Supreme Court overrules the decision, an Illinois employer cannot enforce any non-compete or non-solicitation clauses in an employment agreement until after the employee has worked there two years. The attorneys at Ogletree Deakins call this a “sea change” in the way courts in that state will now treat pre-employment restrictive covenants (and others at or near the time a worker begins employment).

In Oklahoma, where non-competes and non-solicits have been all but impossible to enforce, the legislature is loosening things up. But only slightly. Beginning Nov. 1, a new law will allow employers to stop former employees or independent contractors from trying to entice their former co-workers away. However, the way the Oklahoma courts have interpreted previous non-solicitation agreements is very narrowly, meaning an employer probably won’t be able to stop a former employee from hiring existing workers who approach them.

Non-Competes and Restrictive Covenants

 

The courts in two states decided cases recently, weakening non-compete clauses, while in Oklahoma, a new law takes effect Nov. 1 that for the first time allows employers some flexibility in stopping departing workers from taking their co-workers with them.

 

In New Hampshire, a judge ruled against an employer in a case involving an independent contractor who opened his own fitness facility, taking with him three fellow trainers and some clients. The employer sued, asking for an injunction, submitting the non-compete agreement the trainer signed.

 

The judge ruled against the former employer, saying non-competes involving independent contractors are different than those among employees. Contractors, the court said, ”have less access to legitimately confidential information of their employers” than do employees. And the relationship is significantly different than that of employer-employee.

 

In Illionis, an appellate court has decided that for a restrictive employment covenant to be enforceable, the worker must first be on the job for at least two years. Unless and until the state’s Supreme Court overrules the decision, an Illinois employer cannot enforce any non-compete or non-solicitation clauses in an employment agreement until after the employee has worked there two years.

Article Continues Below

 

In Oklahoma, where non-competes and non-solicits have been all but impossible to enforce, the legislature is loosening things up. But only slightly. Beginning Nov. 1, a new law will allow employers to stop former employees or independent contractors from trying to entice their former co-workers away. However, the way the Oklahoma courts have interpreted previous non-solicitation agreements is very narrowly, meaning an employer probably won’t be able to stop a former employee from hiring existing workers who approach them.

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John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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