Warner Norcross + Judd LLP attorney Zainab Hazimi discussed the Federal Trade Commission’s proposal to ban noncompete agreements in the Crain’s Detroit Business article “Breaking Down Noncompetes: How employers should prepare for potential FTC ban of restrictive contractual agreements.”
“We know that the tides are changing with respect to noncompete agreements, and we know that states have started to enact laws that are banning or restricting the reach of noncompetes,” Hazimi said.
The FTC’s ban has sparked much debate since its proposal in January, and has sent some employers into panic over what could undo an approximate 30 million noncompete agreements that currently bind employees nationwide. The potential ban is based on findings that noncompete agreements are unfair to employees – limiting their abilities to pursue opportunities that offer higher pay or better working conditions.
Hazimi told Crains that even if the ban doesn’t happen now, it could eventually, so employers should be prepared. Right now, “Michigan [takes] the more general approach – a noncompete is enforceable as long as it’s reasonable in duration, geographic scope and narrowly tailored to the competitive business interest. You can’t impose something that’s so overly broad that it restricts employees from working at all,” Hazimi said.
According to Hazimi, “If this rule comes about and is adopted, that’s going to make it even harder to keep people where they are because it’s one less thing they have to think about before they jump ship.”
Crain’s Detroit Business subscribers can read the full article here.
Zainab Hazimi is a litigator who focuses her practice on employment, supply chain and other commercial litigation for a variety of industries. She has experience litigating in state, federal and appellate courts, as well as in private arbitration. Learn more about her practice here.
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