The last year saw non-compete clauses go through several transitions as much of the workforce shifted to a remote working environment. A new year does not mean those issues will go away, as employers are still struggling with how to deal with remote workers and the language of their non-compete clauses are gaining more scrutiny as a result. The clauses, in general, have garnered the attention of several federal and state governments. Many expect the coming year to bring more restrictions at the state level.
What are Non-Compete Clauses?
Non-compete clauses restrict an employee from going to work for a direct competitor until a certain period has passed. They protect the business from an ex-employee bringing trade secrets to a competitor. Non-competes provide a set time that the former employee is prohibited from moving to a competitor, although time is not always a factor. Some will include geographic restrictions as well as limiting what industries a person can go into after they leave a company.
In other words, a non-compete clause may limit a person from moving from one financial services firm to another in the same town within a few weeks of leaving their job.
What Issues are Associated with Non-Compete Clauses?
Some problems have arisen with non-competes, such as the size and scope of these agreements, as well as the impact of remote work. Originally, the clauses would only limit former employees from moving to a competitor within a few weeks or months. However, over time, these provisions grow over just a few months. They can also change geographically to expand beyond the physical location of the company. In some cases, they have encompassed the entire country. These expansions have caused non-competes to come under scrutiny with opponents claiming that they unnecessarily limit a person’s ability to make a living.
Some states have also placed restrictions on what an employer can make a firm sign, while others have banned their use. Where it gets difficult for employers has to do with employees who are now working from home in a jurisdiction that might treat non-compete clauses differently than how the office’s jurisdiction handles them. The courts explained that the onus is on the employers to word their agreement in such a way that clarifies any discrepancies in jurisdictions.
How are States Handling Non-Compete Clauses?
Each state is handling non-compete clauses in their own unique way as some take an aggressive stance against them and others are more lenient. Some states will limit the geographic reason or the timeframe that an employer can use it in their agreements, while other states may not restrict or enforce these agreements.
What is in Store for These Agreements?
The federal government has made several attempts to pass legislation that would limit these agreements or outright ban them; however, those efforts have failed. Any restrictions on non-competes will most likely come from individual states as pressure mounts on local governments to limit them. Those states that currently do not have anything on the books addressing non-competes will push to adopt something, especially if they do not see anything from the federal government.
Philadelphia Non-Compete Lawyers at Sidkoff, Pincus & Green P.C. Help Clients Understand Non-Compete Clauses
Whether you’re an employee or an employer, understanding your non-compete clause is essential. If you want to make sure you understand your legal rights pursuant to a non-compete cause, contact the Philadelphia non-compete lawyers at Sidkoff, Pincus & Green P.C. today. Contact us online or call 215-574-0600 for an initial consultation. Located in Philadelphia, we serve clients throughout South Jersey and Pennsylvania.