Compliance Stuff

In a significant decision, the Delaware Supreme Court reversed the dismissal of Payscale, Inc.’s breach of contract claims arising from Erin Norman’s alleged violations of the noncompete, non-solicitation, and confidentiality provisions contained in the incentive equity agreement that she signed as an employee. The decision reaffirms: (1) nationwide, 18-month noncompetes may be enforceable when they are sufficiently tied to an employer’s articulated economic interests, (2) contingent equity awards are legally sufficient consideration for restrictive covenants , and (3) a plaintiff may plead circumstantial allegations to support claims for breach of non-solicitation and confidentiality provisions. Background Norman entered into an incentive equity agreement that included noncompete, non-solicitation, and confidentiality provisions. In exchange, she received “Profit Interest Units” (PIUs) in Payscale’s parent holding company. At the time, the PIUs were valued at $0, but the PIUs would v...

Kansas has long been an enforcement-friendly state for restrictive covenants, and it just got friendlier. A new state law, which took effect July 1, provides clearer guidelines and stronger protections for businesses seeking to enforce restrictive covenants . The new framework is especially helpful for employers that use customer or employee non-solicitation terms in their employment contracts . We’ll explain everything Kansas employers need to know about these changes, and what steps you should take next. Quick Background Earlier this year, Gov. Laura Kelly signed a bill ( SB 241 ) into law that made clarifying changes to the Kansas Restraint of Trade Act. The SB 241 updates took effect on July 1. Prior to July 1, the state law required a presumption of enforceability for restrictive covenants in employment agreements so long as they were “reasonable in view of all the facts and circumstances” and did not “contravene public welfare.” While this standard was enforcement-friendly, wheth...

On February 26, 2025, Federal Trade Commission (FTC) Chairman Andrew N. Ferguson directed the agency to form a new “Joint Labor Task Force” that will focus on enforcing federal antitrust laws to protect competition in labor markets and consumer protection, including targeting unreasonable noncompete agreements, no-poach, non-solicitation, and no-hire agreements, and unlawful use of diversity, equity, and inclusion (DEI) metrics. Quick Hits The FTC is establishing a task force aimed at enforcing antitrust laws in labor markets, including where unreasonable noncompete agreements and other restrictive employment practices implicate antitrust issues. Aligning with the Trump administration’s “ populist” agenda, the task force is focused on easing “restraints both on the competition side and the consumer protection side that make it harder for Americans to earn a living.” Notwithstanding this agenda, it is very unlikely that the FTC will attempt to solve these issues through the rulemaking ...

Washington state law just changed in a way that might have made your company’s non-solicitation agreements unenforceable and illegal. Recent amendments to the state non-compete statute took effect on June 6 and significantly changed both the statute and existing case law when it comes to which non-solicitation agreements can be enforced by employers. The new law also broadens the definition of prohibited non-compete agreements. You will need to re-visit your employment agreements to ensure they are compliant with the amended statute. Quick Background on the Washington Statute Washington’s non-compete statute has been in effect since 2020. To be valid and enforceable under the law, such an agreement must: Disclose the terms of the agreement before employment begins, or else be accompanied by independent consideration; Allow for adjudication of disputes in Washington (choice of law provisions for other states render the agreement void); and Involve an employee earning overcompensation fl...