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University of Florida Journal of Law & Public Policy

Abstract

This Article summarizes the Uniform Restrictive Employment Agreement Act and compares it to the proposed Federal Trade Commission rule that bans noncompete agreements. The Uniform Act regulates the whole family of restrictive employment agreements, including noncompetes but also confidentiality agreements, nonsolicitation agreements, no-recruit agreements, payment-for-competition agreements, and training-repayment agreements. By contrast, the FTC rule covers only noncompete agreements and their functional equivalents. Both the Uniform Act and the FTC rule cover all workers, including employees and independent contractors. While the FTC rule bans noncompetes for all workers, the Uniform Act bans agreements for low-wage workers (defined as those earning less than the state average annual wage) and regulates but does not ban restrictive agreements for higher-wage workers. For these latter agreements, the Uniform Act requires employers to give workers advance notice. The Uniform Act also establishes clear substantive criteria for each type of agreement, including that the restrictive period cannot last more than a year in most cases. The Uniform Act also establishes penalties and allows a private right of action. The FTC rule has more limited enforcement procedures and no private right of action. This Article concludes that, on balance, the Uniform Act does a better job of enhancing worker mobility while protecting legitimate employer interests. Additionally, this Article suggests that the FTC include a reverse preemption clause in its final rule so that a state legislature that enacts the Uniform Act would not have to comply with the total noncompete ban of the FTC rule. The bulk of this Article was written before the FTC issued its final rule. In a postscript, this Article analyzes the role of the Uniform Act under two scenarios: First, the final FTC rule never goes into effect because a court enjoins it or a subsequent administration rescinds it; Second, the FTC rule remains in enforce indefinitely. Under either scenario, the Uniform Restrictive Employment Agreement Act could play a useful role and state legislatures should consider adopting the Act.

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