As the news has reported, President Joe Biden is signing an Executive Order that the White House hopes will promote competition in the economy. One component of the Order instructs the Federal Trade Commission to adopt rules to curtail covenants not to compete (also known as “non-competes”). Non-competes potentially affect as many as 60 million private-sector American workers, and they serve indirectly to reduce wages by limiting employee mobility. (After all, if an employee cannot leave for another comparable job, what incentive does that employer have to give that employee a raise?)
New federal regulations could be a game-changer for Connecticut’s employees. As employment lawyers who represent employees throughout Connecticut, we at Garrison, Levin-Epstein routinely hear from workers who have signed a non-compete and are uncertain about their rights and obligations. And these workers have good reason to be uncertain, because the law around non-competes is very unpredictable. Non-competes are generally governed by state law, not federal law, and in Connecticut – unlike other states –0 there are very few statutes that dictate when non-competes are enforceable. (A 2016 statute governs non-competes for physicians, but that is by far the exception.) For most Connecticut employees, then, their non-competes are enforceable only so long as they are “reasonable.”
So when is a non-compete reasonable? It is difficult to know, and that is the problem. Without any hard-and-fast rules about the enforceability of most non-competes, there is almost no way for Connecticut workers to know their rights without hiring an employment lawyer and – in at least some cases – litigating the issue in court. Which, of course, is both time-consuming and expensive.
As advocates for Connecticut workers, Garrison, Levin-Epstein has supported new Connecticut laws to address the ubiquity of non-competes and to provide more certainty and predictability for employees and employers throughout our State. Unfortunately, our efforts came up short in the 2021 legislative session, but we encourage Connecticut residents who are concerned about this issue to contact their legislators and make this issue a priority.