KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** FTC ban on non-competes a dead issue – be sure you use non-compete agreements September 3, 2024 ********************** FTC ban on non-competes a dead issue – be sure you use non-compete agreements ********************** A Texas federal judge struck down the Federal Trade Commission’s ban on non-compete agreements in employment contracts, holding that the ban violates the Administrative Procedure Act and exceeds the agency’s statutory authority. The ruling applies nationwide. FTC’s ban had been set to take effect September 4, 2024. I predicted that the FTC ban would never go into effect in several prior articles, which doesn’t make me a sage or fortune teller. It might mark me as a strict constitutional leaning attorney, hint at my political persuasion or just a good lawyer. I’ve often commented that in view of the Constitution provision prohibiting Congress to enact laws interfering with contract I wondered just how far and how long the erosion of that provision will go. We, the people, have given up on interference with consumer contracts – they are regulated in all states with federal and state laws designed to protect the consumer. Non-competes are of course popular for employment agreements, buy-sell agreements, confidentiality agreements and other agreements. Non-compete provisions are found in several of the K&K Standard Form Agreements. There are laws, usually case law, those imposed by Judges not legislators, about reasonableness of non-compete provisions to be enforceable, or the reverse, not enforceable. I see stupid non-complete provisions from time to time: employee can’t leave employ and work in the alarm industry in the US for every, or 10 years etc. That could be in an employment or sales agreement for a local company that does business in a five mile radius in some obscure city or town. Why a FL alarm tech can’t move to California and work in the industry is not a question I’d like to try and support. It makes no sense to prevent that tech from working there. [By the way, how smart or valuable can that tech be moving from FL to CA …..- sorry couldn’t help myself]. Non-competes are of course entirely essential and reasonable in many situations. The non-compete should be tailored to protect the interest of one party [employer or seller or manufacturer or vendor] without unduly hindering the other party’s ability to earn a living. The underlying public policy for that proposition is that it would hurt the general public to permit such restrictions. I guess that more true now than in any past since getting on the public assistance roles is easier than ever – public policy, at least for now, is promote people working, not on public assistance not working. But one party might very well be entitled to be protected. A balance needs to be reached; one shoe won’t fit all feet. Lawyers are needed; lawyers that know your industry and know the law in your industry. The All in One contracts have non-solicitation and non-compete that the customer agrees to so it won’t poach your employees. The Employment Agreement contains a non-solicitation and non-complete so your employee can’t steal your customers and proprietary ideas. The Asset Purchase Agreement has non-solicitation and non-compete for the seller and sometimes key employees. Any K&K contract that requires the non-compete language has it in the contract. Think you don’t need to be concerned with non-compete? Well maybe not, until you do, and then if you don’t have the agreement it will be too late for you. 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Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth ****************************** Getting on our Email List / Email Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com
