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  • Jody McLeod

Noncompete Agreements and the new Administration

The new Biden Administration has indicated it will focus attention on minimizing employers use of competition agreements and banning no-poaching agreements. He has also indicated that he will allow only those that are determined to be necessary "to protect a narrowly defined category of trade secrets."

This is not the first time noncompetition and other restrictive covenants have been challenged as too restrictive or claiming such covenants become an impediment to employee mobility. Businesses generally use restrictive covenants when they have legitimate business reasons for requiring them for their employees. An agreement's validity should be assessed by considering the industry the employer is in, its geographical location and, legitimate business concerns surrounding the security of its proprietary information.

An employer should be able to protect its business so long as it's not an illegitimate overreach impacting employees right to work where they want. Employers may have to reassess their business models and use of restrictive covenants if the Biden Administration follows through with its stated desire.

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