The Uncertain Future of Non-Competes – WRAL Talks to Smith Anderson’s Isaac Linnartz About Proposed Ban on Non-Compete Clauses

Non-compete clauses for employees are facing new legal and regulatory challenges, and Isaac Linnartz, a Smith Anderson attorney who co-leads the firm's Non-Compete and Trade Secrets practice, spoke to WRAL about what those changes could mean for businesses.

In January, the Federal Trade Commission (FTC) announced a proposed rule that would ban non-compete agreements across the country. The new proposal is especially important for businesses in the Triangle, with its focus on technology, research and innovation. From medicines to manufacturing, the Triangle has become a beacon for innovative thinking and creative solutions. Many of these employers ask workers to sign non-compete agreements to protect their customer relationships and goodwill and prevent disclosure of proprietary information and trade secrets, Isaac said.

“Of course, employers sometimes overreach and have non-competes with categories of workers who don’t really fit that bill,” Isaac said. “For example, a lot of the opposition to non-competes focuses on low-wage or medium-wage workers who don’t have significant customer relationships or access to confidential information or trade secrets.”

The proposed ban faces significant regulatory hurdles and any final rule will almost certainly be challenged in court. Isaac posits that if a ban on non-competes does eventually go into effect, it would force employers to look elsewhere to protect their interests and employers could shift even more toward using confidentiality and non-disclosure agreements and relying on federal and state statutes prohibiting misappropriation and use of trade secrets and other intellectual property.

A PDF of the full WRAL story can be viewed here.