Courthouse News Service Highlights Isaac Linnartz’s Thoughts on Non-Compete Ban

Courthouse News Service (CNS) quoted Smith Anderson attorney Isaac Linnartz in a story that explores how the Federal Trade Commission’s ban on non-compete clauses will mean big changes in the workplace, if the rule goes into effect.

In the article "Businesses struggle to adjust as FTC rule bans noncompete agreements," CNS reports that the FTC’s decision will "leave employers scrambling in the short term and could lead to major changes in how companies operate in the future." But the ban does not apply to those who are deemed "senior executives," and begs the question as to who qualifies as a "senior executive," CNS reports.

The FTC rule says it’s someone who earns at least $151,164 a year and has "final authority to make policy decisions that control significant aspects of a business." The minimum includes base salary and nondiscretionary bonuses, but not discretionary bonuses, health and life insurance or retirement contributions, Isaac told CNS.

Moreover, a "year" can mean the last 52 weeks, the last fiscal year, the last calendar year or the last year following the anniversary of the executive’s hire date. The agreement is enforceable if the executive earns at least $151,164 under all four tests, Isaac said.

"It can be a close call, and you might need an accountant," he added.

Isaac focuses on business litigation, employment litigation and pre-litigation dispute assessment and risk mitigation. He has represented businesses in high-stakes litigation involving complex contract disputes, corporate governance issues, trade secret and confidentiality matters and various business torts.

The entire article can be viewed here.