The employee works for the company. The employee is therefore vertically in the company. An agreement on non-compete agreements for workers is therefore a vertical restriction. The Federal Trade Commission and the Department of Justice`s Department of Agreements state that non-competition obligations that are incorporated into any type of transaction under review are subject to extensive review. The scrutiny of the proposed competition bans is now another issue to be considered when negotiating an agreement. In particular, the FTC recently agreed to enter into a contract for Nexus Gas Transmission to purchase a pipeline in Ohio from North Coast Gas Transmission. However, the FTC did so only after the parties themselves agreed to enter into a non-compete clause in the agreement prohibiting the seller from competing with the buyer. One of the key factors in many courts (wrongly) when it is considered that the motivational rule should apply is the historical design of workers` non-compete agreements as harmless vertical restrictions. But this view is totally absurd. The adoption of this position is an unfortunate product of corporate well-being, judicial activism and the invocation of the totally unfultable right. The standard (false) argument is this: more than forty years ago, the United States Court of Appeals for the Second Circuit found the evidence that employee non-compete bans can be considered potential violations of Section 1 of the Sherman Act. Unfortunately, since that time, and particularly over the past twenty years, the abuse of non-competition prohibitions has become widespread and unchecked in some systems.
In places like Florida and Texas, competition bans are common in all sectors. Similarly, the application of the non-competition clause in these countries is an important profit centre for powerful, politically interconnected and court-attached lawyers and law firms. The result of all this: non-competition bans have become terribly normal. And it doesn`t make sense. The courts regularly cite the „Black Letter“ case law, which states that „trade restrictions are strongly disapproved.“ But these same courts turn and regularly impose non-competition bans against the poor, working class and middle class. The emperor has no clothes. If, in fact, trade restrictions are highly unfavourable, non-competition bans would not be so frequent.
Neueste Kommentare