Partner Greg Care spoke with The Daily Record about the effects of the Federal Trade Commission’s vote to ban non-competition (or non-compete) agreements for U.S. workers in a recent rulemaking. The ban is set to take effect in the coming months pending some extant legal challenges to the rule.
Greg said the FTC’s rule is ambitious and expansive in breadth, but welcome for his clients and the overall reform of non-compete agreements.
While the FTC’s ban on non-competes has resulted in mixed reactions from Maryland organizations and individuals, Greg told TDR that something “the FTC was very careful to point out was this final rule … still allows employers to enforce nondisclosure agreements and non-solicitation agreements,” Greg said.
Greg explained that based on case law in Maryland, “it’s clear that the protectable interest that employers have isn’t to prevent competition.”
Instead, Greg said, Maryland case law expressly says employers can’t try to “hold on” to a particular employee to prevent competition with them but can preserve the goodwill the employee builds with his or her work with the employer.
“It’s not competition, it’s preservation of goodwill, and that’s a really important distinction that I think a lot of the arguments against non-competes don’t really recognize,” Greg told the publication.
Read more about Greg’s key takeaways from the Federal Trade Commission voting to impose a near total ban on non-compete clauses in the United States in his recent blog post.
Earlier during this year’s legislative session in Maryland, legislation passed that would prohibit non-compete agreements for certain veterinary and health care professionals. Governor Wes Moore signed the bill into law on April 25, 2024.
“This is an important step forward in the reform of non-compete clauses that all too often have a deleterious effect on our health care workforce and the public,” Greg said in a blog about this legislation.
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