The Obama Administration has been pretty hostile to non-compete agreements. Last May, the Administration issued a report critical of non-compete agreements, and recently urged states to restrict the scope on non-compete agreements and take measures to increase their transparency. Even before the Obama Administration did this, many states had passed laws limiting the ways that employers can use non-compete agreements. Illinois has been one of these states, making those agreements illegal for low-wage workers.
So, what can we expect under a President Trump? Will he continue the hostility towards those agreements demonstrated by the Obama Administration? Trump did not say much about non-compete agreements during the campaign, so it is not entirely clear how his administration will treat them. He ran on a campaign to help blue-collar workers, so it is possible that he will continue the trend toward restricting their use for low-wage workers.
It seems more likely, however, that the Trump Administration will take a more benevolent view towards non-compete agreements. After all, Trump himself has used non-compete and non-disclosure agreements quite frequently in his own business dealings. Moreover, Trump’s cabinet is filled with people who are pro-business and likely not keen on restricting the use of non-compete agreements by businesses. Additionally, Trump has vowed to repeal two regulations for every one that is passed, so it seems unlikely that the Department of Labor will be motivated to sacrifice two existing regulations so that it can restrict business use of non-compete agreements.
Ultimately, what President Trump does with regards to non-compete agreements will have less effect that what the states do. The states have a broader role in regulating non-compete agreements than the federal government. So, employers should stay abreast of developments in their state regarding non-compete agreements. A great way to do that is by checking in on this blog regularly, where we frequently discuss new legal developments affecting non-compete agreements.
