Continued Gov’t Pushback On Non-Competes

Two recent state actions, one in Illinois and one in New York state, target the over-use of non-compete agreements, particularly when they involve employees who are not privy to trade secrets or other confidential information. In Illinois, a law that prohibits non-competes with low-wage workers was enacted in August. Notably, says this post from Orrick, Herrington & Sutcliffe, it does not prohibit non-disclosure and confidentiality agreements. And in New York, under the terms of a settlement with the attorney general’s office, a medical information services provider agreed to stop requiring its non-executive employees to sign non-competes. “These continued efforts by governments,” says Orick partner James H. McQuade, “should serve as a reminder to employers that, before requiring their employees to sign non-compete agreements, employers should carefully consider on an individualized basis which employees should be required to sign non-compete agreements.”