The implementation of the District of Columbia’s ban on most non-competition agreements has been delayed by the District of Columbia Council until October 1, 2022.

On July 9, 2021, President Biden issued an Executive Order that seeks, among other things, to ban or limit non-competition agreements. Many states already limit such non-compete agreements, as opposed to non-solicitation or confidentiality agreements that are usually enforced.

In a recent decision, the Fourth Circuit reaffirmed a constitutional right to informational privacy and joined other circuits in rejecting a private cause of action for violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

The District of Columbia Council recently passed an Act banning most non-competition agreements entered into after the Act’s enactment.  This is the latest in a trend among states and localities to significantly restrict non-competition agreements for most employees.  The Act now goes to the Mayor, although it passed with a veto-proof majority.

While non-competition, non-solicitation and trade secret litigation seems to be at the forefront in today's mobile gig economy, employers need to remember that they cannot go after an employee under an existing employment contract unless the contract itself provides a way out for the employee.  While employers may argue that it is all just healthy business competition, inducing a breach is often wrongful in and of itself. Moreover, a potential new employer should take very seriously any letter received from the former employer’s attorney and seek to resolve these issues before allowing the new employee to begin work.  Once the employer knows of possible wrongful conduct, it might find itself on the hook for damages, as well.   

Tesla recently sued a competitor and former employees for violations of state trade secret laws, breach of contract and interference with contract. This case is a bit different because in addition to claiming that the departing employees took technical data related to the production of Tesla's electric vehicles, the lawsuit also alleges that the employees took recruiting and employment data.

For those who do business or litigate in Virginia, you should be aware of two noteworthy laws that take effect July 1, 2020. With the first, Virginia becomes the latest state to ban covenants not to compete for low wage employees . The second law creates a private cause of action for misclassified workers if their employers had knowledge of the misclassification.

In the corporate world, highly placed executives and owners often earn several different types of post-separation compensation.  Some consult for their prior employer, while others may simply bargain for a severance or earn-out package.  In a recent case from the Fourth Circuit, the court was presented with four employees who voluntarily participated in a post-separation incentive program.  The incentive program provided for post-separation payments so long as the employees did not compete with their former employer.  The employees subsequently violated the agreement and the employer sued.  The question for the court was what to do with the payments already made to the employees.