Compliance Stuff

Executive Summary:  Following last year’s unsuccessful attempt to ban noncompete agreements, New Jersey’s legislature introduced a new bill on May 19, 2025, to prohibit the use of noncompete clauses. The Proposed Act’s Impact on New Jersey Businesses This bill, known as “S 4385,” provides that no employer may require a noncompete agreement from any employee or other individual . Under the bill, every clause to restrain anyone from engaging in a lawful profession, trade, or business of any kind is void. If enacted, the bill will require every covered employee with a noncompete to be advised in writing by the employer that those noncompete clauses are no longer valid and not enforceable. The Proposed Act’s (Limited) Exceptions The bill provides narrow exceptions to the ban on noncompete clauses: If a cause of action related to a noncompete clause accrued before the bill’s effective date; Noncompete clauses entered into by an employer under a sale of a business; or Noncompete clau...

The hot mess known as the FTC Rule to Ban Non-Competes (“Rule”) continues to get hotter and messier as two Federal District Courts issue conflicting opinions. This conflict between the Federal Courts will not be resolved before the Rule’s “enactment” date of Sept. 4, 2024 . Given the uncertainty over the Rule, below is a short Q&A follow-up to our April 23, 2024 Client Alert that provides the latest updates on the Rule and the options companies have regarding compliance. Q : Remind me again, what does the Rule state exactly about banning Non-Competes? The Rule states that “it is an unfair method of competition for a person: (i) To enter into or attempt to enter into a non-compete clause; (ii) To enforce or attempt to enforce a non-compete clause; or (iii) To represent that the worker is subject to a non-compete clause.” The Rule contains an exception for “Senior Executives,” which is discussed below. Q: Ok. And how does the Rule define a Non-Compete clause? According to the rule, a...