Guide · Labor and Employment

Restrictive Covenants and Employee Mobility: A Comprehensive Guide

15 U.S.C. § 45

Type
Guide
Jurisdiction
National
Date
2024-10-08
Topic
Labor and Employment

A complete practitioner's treatment of restrictive covenants and employee mobility for employment counsel, litigators, in-house lawyers, and anyone advising on a departure or a competitive hire. Parts I through IV cover the taxonomy of mobility restraints, the common law reasonableness framework and the protectable interest requirement, the consideration and formation rules that vary sharply by state, and the calibration of duration, geography, and scope of activity. Parts V and VI cover the state statutory wave including income thresholds, advance notice and timing requirements, garden leave and payment obligations, and the rise and fall of the FTC non-compete rule and what remains of federal competition authority over covenants. Parts VII and VIII cover the blue pencil, equitable reformation, and red pencil approaches and the drafting consequences that follow from each, and the choice of law and forum battles now complicated by anti-enforcement statutes in California, Colorado, Washington, and Minnesota. Parts IX through XI cover customer and employee non-solicitation, the criminal and civil antitrust exposure created by agreements between employers, and confidentiality and invention assignment agreements with their state law limits and statutory notice requirements. Parts XII through XIV cover trade secret protection under the DTSA and UTSA including inevitable disclosure and the whistleblower immunity notice, the mechanics of emergency relief and expedited discovery in a departure case, and the NLRA and securities law limits on overbroad agreements together with the protocol for hiring from a competitor. Part XV is the verification list.

Restrictive Covenants and Employee Mobility: A Comprehensive Guide

Labor and Employment > Restrictive Covenants | Published 8 October 2024 - Updated 3 June 2026 | UpLaw - uplaw.us

In brief. Four questions decide almost every covenant case. Is there a protectable interest? Is the restraint tailored to it? Which state's law actually applies? And what happens when the covenant turns out to be too broad? The fourth question — blue pencil, reformation, or total voidness — should drive the drafting, and almost never does.

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