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Your Non-Competes Just Got Weaker In Some Places


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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.

 

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.

John has been writing about recruiting and employment for nearly a decade,and has worked in the field for almost twice as long. He traces his connection to the employment industry back to the beginning of the commercial Internet when he managed some of the earliest news oriented websites. These offered job boards, which became highly popular with users. John worked with agencies and large employers on job postings, resume search, and campaigns, before consulting with media companies on audience development and online advertising sales.