The Division of Justice (DOJ) and federal authorities proceed to aggressively pursue antitrust violations and promote the federal authorities’s curiosity in closely limiting the usage of non-competition agreements. Whereas the DOJ has lately been unsuccessful in its goal of “no poach” and “no hire” agreements and wage-fixing points in antitrust trials, employers mustn’t interpret this as an indication the federal government will again off its efforts to restrict the usage of non-competition agreements by employers throughout all industries.
With the DOJ taking a extra energetic function in prosecuting antitrust issues, there’s a actual threat antitrust claims will more and more acquire traction in restrictive covenant litigation. In actual fact, the DOJ lately filed a Assertion of Curiosity in a Nevada state courtroom case concerning the enforceability of post-employment restrictive covenants of anesthesiologists. The DOJ inspired the state courtroom to think about antitrust ideas when evaluating the restrictive covenants, and additional asserted its place that post-employment restrictive covenants could represent impermissible restraints of commerce underneath the Sherman Act, whereas offering a roadmap for the courtroom to declare the agreements unenforceable on this foundation.
Whereas the validity of non-competition agreements at the moment stays managed by state legislation, the federal authorities’s consideration to such agreements could in the end restrict the usage of such agreements to conditions the place the settlement is really mandatory to guard a well-defined class of commerce secrets and techniques. Employers ought to maintain this in thoughts when making ready new agreements and take the time to rigorously consider present non-compete agreements and hiring practices to find out any potential points. And, for employers who’ve or are considering “no hire” agreements with opponents, it’s sensible to think about how these could also be scrutinized if challenged.