US Non-Compete Ban Excludes "Senior Executives"
While the FTC announced a "Rule Banning Noncompetes," this ban has an important exclusion for "senior executives" that will likely cover many senior technology professionals.
The FTC defines such "senior executives" as those "earning more than $151,164 annually and who are in policy-making positions," but what is a "policy-making" position?
In this report, IPVM examines the hundreds of pages of rule-making details to explain what the US government defines as a policy-making position and how it may impact senior professionals.
Executive *******
*** ***'* ***-******* *** ****** ** overwhelming ***** ** ********** *************.
*******, ** ******* *** **** *********** risk ** *** ****** ************* ** smaller ********** ********* (********** ***** ** employees) *** **** ** ** *********** for ******** ***** ** *** ******** and ****** ***** **** ***-******** ******** even ***** **** *** "***." *** US *** ******** ****** ***** ************ blocking **** ********* **** ***** ******* to ********** ***** *** ************, *** broader ********* *** ***** **** **** general ********** *****.
*** ********* ******** "****** **********" ***-******** applies **** ** ******** **********. *** non-competes *** *** ********* *** *** employees, ************ ** ********.
***** ********* *** *** **** **** many **** "******-******" ********** **** ***** companies (** *** *** ******* ****), meaning **** **** ********* **** ****************** impact ***** ********** **********. ***** ** small ***-********** ********** *** *** ** impacted ***** *** ************ *********, *** for *** ***** ** ****'* **********, many ** **** ***** **** **** threshold.
**** ********** ****** ****** (******* ** not **** **** "*********" ** "**" in ***** *****) ** ********* ***** how **** ********* ***** ** ******* to **** ** ***** ******* ** future ***** **** *** ***********.
FTC ********* *** ***-******* ****
** ***** **, ****, *** ** Federal ***** ********** (***) ***** ** prohibit ********* **** ********* ********** ********** against *******. *** ********** ********** **** noncompetes ******* ******* * ** *** Federal ***** ********** ***. **** *** rule ***** ******, ********* **** ** prohibited **** ******** **** *** ***********. The **** **** ********* *** *********** of ******** *********** **** *** "****** executives." *** **** **** **** ****** 120 **** **** *********** ** *** Federal ******** ****** ******* ** ***** challenges. *** *** ******* ******* *********** will **** ** *** ******** ** 8,500+ *** ********** **** **** *** increase ****** ******** ** $***+ ******* over *** **** *** *****.
Senior ********* ******* **** ***********
*** ***** **** ******* **** *** preliminary *** **** ******* ** ******** for *** ****** ********* *** *********. In *******,*** ********** *********** *****:
*** ******* *** *** ****** **********, the ********** ************* ***** *** *** by ********* ** ***-******* ******* ** “unfair” ***** ******* * ******* **** non-compete ******* *** *********** ******* **** negatively ******* *********** **********. [******** *****]
***, *** ***** **** ****** **** out *** ****** **********.
Final ****
******* ***** *** *** *** ** *** 500+ **** "***** ******,"***** ** ******* ******.
Policy ******
*** ***'* ******** ** **** ***** responsibilities **** *****. ** ****** ** defining ** ** ******* ***, *********, or ********** *** **** ****** *** have "******-****** *********":
******* ***.* ******* “******-****** ********” ** a ******** ******’* *********, ***** ********* officer, ** *** **********, *** ***** officer ** * ******** ****** *** has ******-****** *********, ** *** ***** natural ****** *** *** ******-****** ********* for *** ******** ******.
*** *******, **** ********** *** ** included, *** *** *** ********** ** is ***** **** *** ** **** rather **** *** ***** ******:
*********, ********* ** *** ************, * vice ********* *** **** ***** ******-****** authority **** *********** ******* ** * business ******. *** ******* ********** ** based ** ********** *** ****** ****** than ****** *** ******.
* *** ******* ** ******* *** "senior *********" *** "***** *********" *** not ****** ******** ********* ** *********:
*** ********** ***** **** **** *** instructive *** **** ******* “******-****** *********” in *** ***** **** ** “final ********* ** **** ****** ********* that control significant aspects of a business entity and does ********** ********* ******* **advising ** ******** ********* over such policy decisions.” [emphasis added]
********, *** *** ******** **** ** be **** *** ******** "** * whole," ********** ********* ***********, ********* ** example ** *** ********* ******** **** being ********:
** ***** ** ****** **** *****-***** workers, **** *** ********** ***** ****** experience ************ *** ********, *** *** included ** *** ********** ** ****** executive, ******-****** ********* ** ******** ***** on *** ******** ** * *****,not * ********** ******, ********** ** ***** ********
*** *******, ** *** **** ** a ********* ******** ** * ************* firmonly ***** ****** ********* *** *** ********* ********, and those decisions do not control significant aspects of the business (which would likely be decisions that impact the business outside the marketin gdivision), that worker would not ** ********** * ****** *********. [emphasis added]
******** **** ************* ******** * ***** range ** *** ** "******" ***** people, *****, ******** *** ********* **** example, ***** ****** ********* ***** ** sales, **********, **, **** *******, ***.
*** *** ******* ********** **** **** if *** ******* *** **** * lot ** **** **** ******, **** alone ***** *** **** **** ******* to **** *********:
********** ****** **** ** ****** ******* workers *** **** ******-****** ********* ** anorganization—do *** **** ****** **** ***** definition....
*** ********** ** **** ********* **** if *** **** ** **** *********, employers *****, ************* ** *********, ***** too **** ******* *** **** *** involvement ** *** ********’* ****** ****** as ****** **********, ********** ******* ******* bargaining *****.
********, *** ********** ********** ********* **** from ***** **** ** * ******** for ***** ******* ** ******** ***** of ****** *********, ******:
*** ****** **** **** ******-****** ********* with ******* ** *** ****** ********** as * *****, *** **** * segment ** **, ** ** * senior *********. ******* *** **** * subsidiary ** ********* ** * ****** enterprise *** ******* ** ********** *****; the ****** ********** *********** *** ****** common ********** ******* ***** ********** ************ and **********.
*** *******, ** * ******** ******** in ******* ****** *** *** ********** in **** ***** *** ********* ** their *** ***********, ******** ***** ********** and *** ****** ******* **** *** criteria *** * ****** **********, *** head ** **** ***** *********** ***** not ** * ****** *********
************
*** ******* *** **** *** ********* to *****, ** ******** ** *** "policy-making" *******, ** *** *** ******** to **** * "***** ****** ************ of ** ***** $***,*** ** *** preceding **** (***** ********* (*)(*));" ** when ********** *** **** ** *** year ** *** ********* **** (** described ** *. *** *** ***).
** ********** *** **** *** ***********, which **** ****** ********** ******* ****************** who **** ** ****** **** ***** areas, **** *** *** **********:
*** ********** **** ******** ** ***** a ******** **********....
********* * ************ ********* ** ***** locality ** **** ***** ** ****** would ** ********** *** ******** *********** confusion *** ******* *** *********. *** Commission ***** **** *** ********** ** a ******* ********* ** ***** ********* and *** **************** ********* *** ********* of *** ********** ***********, ************ ** light ** ******** **** ********* ******* that *** ******** ********* ** ***** laws ** ********** ** ********
*** ************ ********** ******** ******** ************ such ** ******* *** *********** *** excludes ********** *** ******* *****, ***., as ********** *****:
******* ***.*, **** ***’* **********, ****** that ***** ****** ************ *** ******* salary, ***********, **************** ******* *** ***** nondiscretionary ************ ****** ****** **** **-**** period. **************** ******* *** ************ ******** compensationpaid ******** ** *** ***** ********, agreement, ** *******, ********* *********** ******* the ***** ** ***** *** ****** knows *** *** ******.*** *** ********** further ****** **** ***** ****** ************ does *** ******* *****, ******* *** other ********** ** ******* ** ** CFR ***.***,*** **** *** ******* ******** for ******* *********, ******** *** **** insurance, ************* ** ********** ***** *** the **** ** ***** ******* ****** benefits
**** ********* **** ***** **** ** the **** ********** ** ******** *** recognized **** **** ******* *** ****** would ******** ****** *** ************ ********* but ** ******** ** *** ******-****** one:
**** ********* ** ***** ** *** 85th ********** ** ******** ** ****-**** salaried ******* **********
*** ********** ***** **** **** **** high-wage *********** **** * ****** **** above $***,***, *********: **********; ********; ******** and *********** ******* ********; *** ********.*** To ******* *** *** **********, ***** workers ***** **** ** **** **** the *** ****** ******* ** *** senior ********* ****, ***** ** *********** because *** ********** ***** **** ******* in ***** *********** *** ***** ******* to ******** *** ************ *** ****** have *******, ********** ***-********
Exemption *** ******** ********** ****
***** ******** ***-******** **** "****** **********" are ***** *********, ** *** ***-******* agreements *** ********* ************ ** "****** executive" ******. *** *** ******** *** ************ ** *** ****:
***** *** ***’* *** ****, ******** noncompetes *** *** **** ******** ** workers **** ** ****** ** *********** after *** ****’* ********* ****. ******** noncompetes *** ****** ********** - *** represent **** **** *.**% ** ******* - *** ****** ** ***** ***** the ***’* ***** ****, *** ********* are ****** **** ******** **** ** attempting ** ******* *** *** ***********, even ** **** ******* ****** **********.
In ******** *******
*******, *** *** ******** **** **** will ****** *** "** ******** *******" of ********* *********** ********* **** ********** over ******* ***-******* ******:
**** **** ****, ****** ************ *** easily **** **** ******* ***** *** line ****** ** ******* ** ***-********, minimizing **** ** ******** ******* *** eliminating *** ************** ****** ** ********** a *** ****** **** ******** *******.
Conclusion - **** ** "**********," ********** ** ******* *****
**** ****** **** ***** **** "****" area, ********** *** ***** ** ******* firms **** ***** **** ******* ****************. In ***** *********, *********, **************** *** divided **** ******* ******** ********* **** the *** ********** ***** **** **** ban *********. ***, ** ******* ****, especially ***** ****** *** **** *****, and **************** *** ******* (*.*., ***** and ********* ** ********** *** ***********, etc.), **** ****** ** ********* **********.
***** *** ******** *** ************** ******* so **** ** *** ******. *** example *** ***'* ** * ** state * ** ****** * ***** of **** * *** * *****.
*'* *** *** ****** *** *'** been **** ****** ***** ***** ***-******** are ****** *************?