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00;00;00;00 - 00;00;23;20
Tom Godar
Welcome to Blackwell’s Labor Law Insider podcast. This is your host, Tom Godar. I've been practicing in the labor law sector for more than 40 years, and I can tell you that in no time of my practice has labor law had greater changes than in the last five, six years. We began the podcast in May of 2021 following the election of President Biden.
00;00;23;25 - 00;00;49;12
Tom Godar
And your elections have consequences. And under the Biden administration, a new National Labor Relations board with the new general counsel reshaped labor policies and they were very consequential. During that time because it was so important to stay on top of liberal issues the family of Husch Blackwell labor law counsel more than doubled in its coast-to-coast reach to assist our clients.
00;00;49;15 - 00;01;18;11
Tom Godar
Well, we’ve since had another election. In the January of 2025, President Trump was inaugurated to his second but noncontinuous term. And once again, we’re seeing significant changes in how the National Labor Relations Board and its appointed members, the GC, right now an acting general counsel and the board members are going to interpret the National Labor Relations Act and its associated laws.
00;01;18;14 - 00;01;49;06
Tom Godar
So once again, we’re continuing a wild ride of labor law. That’s not likely to change soon. So buckle up and enjoy the Labor Law Insider podcast. It is so great to be back, and you are really going to enjoy our Labor Law Insider podcast today. A little bit different, a lot of fun. It’s going to be focused on non-compete agreements and their progeny that sometimes are non-solicitation agreements and their friends and cousins and confidentiality agreements.
00;01;49;06 - 00;02;11;29
Tom Godar
But there’s been changes that affect all of our clients and friends over the past decade. And it continues to change even over the past year or two, as states become more and more involved in revising their own non-compete laws as they’ve sort of waited on, and then decided that the feds really aren’t going to step deeply into this territory.
00;02;12;01 - 00;02;33;08
Tom Godar
Of course, we’re going to go into detail on all of that, and we're going to do it with some really terrific guests today. Tom O'Day is joining us. Tom has been a frequent visitor and true insider, sharing his insights and experiences with us. And Tom, it’s so good to have you back. Tom’s a UW grad practice is primarily out of our Wisconsin office in Madison.
00;02;33;11 - 00;02;40;14
Tom Godar
But Tom, tell us a little bit about yourself and what’s going on these days with Tom outside of litigating or advising on non-compete agreements?
00;02;40;15 - 00;03;02;02
Tom O’Day
Sure. Well, I appreciate the opportunity to be back with the Labor Law Insider. So I am in the midst of the start of football season. I’m excited. My son is on track for nine sack season after one game with one sack, which is extremely exciting. And I’m yeah, we’ve got another game this evening. And then our youth program kicks off this weekend as well.
00;03;02;03 - 00;03;07;20
Tom O’Day
So excited for the football season both at the youth, the high school and college level as well.
00;03;07;27 - 00;03;14;16
Tom Godar
You’re an incredibly busy guy at the time. Are you also coaching or are you just an ardent fan for your youth football for your kids?
00;03;14;22 - 00;03;16;23
Tom O’Day
More on the ardent fan side.
00;03;16;23 - 00;03;37;23
Tom Godar
Great, now watch your tongue there in the stands there, Tom. Exactly. Great to have you on board a time. And I have worked together on some of these non-compete issues, and it’s great to have you. We also have a newbie insider for our day. This is Tracey O'Brien. Tracey is one of our colleagues and practices out of our St. Louis office.
00;03;37;23 - 00;04;01;15
Tom Godar
She’s been with the for many years and came in shortly before the torrid times of Covid and all of that sort of thing, and has been really a rock solid part of our team. And in fact, she’s been recognized by JD supra in the Readers Choice Award as the top author for labor and employment. And she certainly has coauthored and helped me quite honestly, oftentimes as I’ve drafted articles.
00;04;01;15 - 00;04;04;21
Tom Godar
So for Tracey, it’s great to have you joining us.
00;04;04;23 - 00;04;09;05
Tracey O’Brien
Thanks, Tom. It's good to join you and Tom on the Labor Law Insider today.
00;04;09;07 - 00;04;17;21
Tom Godar
Wait, tell us just a snippet of your journey to this area of labor and employment in which you find yourself practicing full time with Husch Blackwell.
00;04;17;23 - 00;04;37;23
Tracey O’Brien
Sure. Well, I started out in a compliance role, the federal government. I moved into private practice and became an employment law litigator. And then I returned, with Husch Blackwell to another compliance role, assisting federal contractors with their compliance obligations with the federal government. So, Tom, I’ve come full circle.
00;04;37;25 - 00;04;59;20
Tom Godar
Well, it’s great to have you join us. And it’s fun to have, but different perspectives and a little bit different topic for our listeners today on The Insider. Lots of stuff has been going on under the Biden administration. And now the Trump administration at the federal level, that relates to non-compete and broad or narrow bands or no bands at.
00;04;59;20 - 00;05;00;16
Tom O’Day
All time.
00;05;00;22 - 00;05;11;20
Tom Godar
Actually refresh us a little bit on the journey and where we stand today as the federal agencies get involved in areas of non-competition agreements and whether they’re enforceable and so forth.
00;05;11;22 - 00;05;44;22
Tom O’Day
Sure. So I think a nice place to start would be just to review the definition or what is encompassed by the term non-compete agreement. And I always look at this is five different types of a restrictive covenant. There is an agreement that an employer or company might entertain with their employees to protect their trade secrets. A second type of agreement is an agreement to protect an employer's non trade secret, but still confidential information.
00;05;44;25 - 00;06;12;29
Tom O’Day
A third type of agreement would be an agreement restricting former employees from soliciting other employees of your company. So that might be an employee non solicitation or sometimes called an anti rating provision. A fourth type of agreement would be an agreement restricting former employees from soliciting other customers or vendors or suppliers or patients. That would be a non solicitation restriction.
00;06;13;02 - 00;06;42;27
Tom O’Day
And then the fifth type of agreement, the one that I think most people think of when they hear a non-compete, is an agreement restricting the geographic scope within which a former employee can work in a competitive environment. So that fifth type of agreement, a non-compete, a geographic restriction, might say something like this I agree that I won't work for a period of two years within a 25 mile radius of this office at which I worked for this company.
00;06;42;29 - 00;07;01;27
Tom O’Day
That would be, I think, what most people think of in terms of non-compete agreements. And I think it's important to recognize those different levels of a restrictive covenant, because they're interested in the federal government and going after different types of those varies and is varied by different presidential administration.
00;07;01;29 - 00;07;23;08
Tom Godar
Excellent primer and wonderful to sort of lay out the field a little bit because as we draft these requirements or look at them for enforceability, we look at each of those and say there may be a different analysis on each one. So tell us what's going on. And that and the federal side term regarding non-compete and the various iterations as you describe them.
00;07;23;10 - 00;07;48;20
Tom O’Day
Sure. We know from our labor law practice that especially with the National Labor Relations Board, there is quite a swing in the pendulum of how the National Labor Relations Board interprets and then enforces the law with respect to federal labor law and with one administration, it swings one way with the next administration it swings the next way with the Biden administration.
00;07;48;22 - 00;08;30;01
Tom O’Day
It was really the start of it started with the Obama administration, but it wasn't as much of a focus. But with the Biden administration, they started pretty quickly with an effort to go after non-compete agreements or restrictive covenants more broadly in the American economy. And it was a July of 2021 executive order from President Biden that set the standard for his administrative agencies like the National Labor Relations Board, the Federal Trade Commission and others to really go after and have non-compete agreements or restrictive covenants in their target.
00;08;30;04 - 00;08;43;09
Tom O’Day
And that led to a number of different shifts in federal policy that were aggressively looking to prohibit these non-compete or restrictive covenant agreements and restrictions.
00;08;43;11 - 00;09;10;12
Tom Godar
So we have the start of a federal izing through administrative action. That's what we're talking about, not through legislative action. The idea that non-competition agreements are a restraint of trade or monopolistic. So the FTC gets involved in the NLRB gets involved, saying you're imposing upon collective action. And as a result, having these kinds of agreements may be itself an unfair labor practice.
00;09;10;14 - 00;09;18;19
Tom Godar
Are those all gone away, or is there something left to talk about on this federal izing through administrative action term in 2025?
00;09;18;26 - 00;09;42;21
Tom O’Day
Sure. It has been interesting that in the first now seven months or so of the Trump administration, President Trump has started making indications and his administration of agencies have started making indications that they are going to move away from what President Biden had done. And it came on a couple of different levels just recently with the National Labor Relations Board.
00;09;42;23 - 00;10;10;22
Tom O’Day
The interim general counsel, someone who was appointed by President Trump, rescinded a memorandum that had been issued under the Biden administration and did away with the prohibition. Now, after the interim general counsel did that in February of 2025, there was still some unknown of how would the Trump administration, the Trump National Labor Relations Board, interpret restrictive covenants or non-compete agreements going forward?
00;10;10;24 - 00;10;40;02
Tom O’Day
And we just recently, in summer of 2025, now have an advice memorandum from that same interim general counsel with that general counsel was taking a look specifically at an employee non solicitation restriction. That said, for a period of time, an employee won't recruit or solicit his or her former coworkers and also a patient or customer or client. Non solicitation restriction.
00;10;40;04 - 00;11;15;08
Tom O’Day
And this interim general counsel of the Trump National Labor Relations Board effectively said those types of restrictions are not unlawful under the National Labor Relations Act. Now, there's a little bit of language that isn't making this generally applicable, but I think it's a good sign for the National Labor Relations Board that they do intend to move away from some of that aggressive enforcement that sought to prohibit non-compete agreements or non solicitation agreements that happened during the Biden administration.
00;11;15;10 - 00;11;58;28
Tom O’Day
And yeah, and that's important for employers, these non-compete agreements, these non solicitation restrictions, these confidentiality restrictions are really important for the business of companies. And I can recall a conference I was at with a United States Senator and a trade association where one of the trade association members spoke up and said was it was during the Biden administration and said this is a big problem for us because we invest so much in our employees with training that we might do for them with the information that we share with them both at the trade secret intellectual property level, but also non trade secret, confidential information.
00;11;59;00 - 00;12;25;04
Tom O’Day
And this leader of a company said we do need to take steps to protect that information warfare about it. Our employees are getting something in exchange for their promise not to solicit our employees or compete with us once we train them or give them access to that important information. So it's really an important business need to protect their assets and their investments that they make in the employees.
00;12;25;04 - 00;12;28;19
Tom O’Day
And ultimately, it comes down to whether it's fair or not fair.
00;12;28;21 - 00;12;50;26
Tom Godar
That's a terrific summary, and we'll make sure that we have in the show notes. We'll have a link to that advice memorandum that you just talked about time. So, right now the feds are not out of the game altogether, but there's not a sort of stampede towards federal izing, if you will, non-compete prohibitions through either the FTC or the board.
00;12;50;28 - 00;13;01;03
Tom Godar
That, of course, means that we're back where we always were, which is that we have a patchwork of state laws that vary quite significantly, that really.
00;13;01;03 - 00;13;02;11
Tom O’Day
Inform.
00;13;02;14 - 00;13;29;11
Tom Godar
Our clients and our friends and employees about what might be a reasonable restraint on their post-employment activity and what might be found to be unreasonable and therefore prohibited. Now, Traci, why don't you give us a sort of idea of what's taking place in the consequential return of enforcement, if it ever really left to states as it relates to non-compete, and I'm using it in the broadest sense for the time introduced when he first started.
00;13;29;13 - 00;14;04;22
Tracey O’Brien
Sure. Well, as the federal government policy shifts on enforcement of non-compete, it will be the states that continue to take the lead role in regulating non-compete agreements. And we've seen this, for example, in 2025. In 2025, 16 states enacted state statutes that either imposed new requirements with regard to non-compete agreements or updated existing restrictions or non-compete agreements. So the trend that we see is that the states are tightening those restrictions on the use of non-compete agreements.
00;14;04;24 - 00;14;34;15
Tracey O’Brien
And as you mentioned earlier, employers, especially multi-state employers and employers with a large remote workforce, will have to comply with a variety of state restrictions. When I think about issues related to non-compete agreements and compliance with these state laws, we can divide the states into two different types. The categories are buckets. In those categories are states that completely ban non-compete agreements.
00;14;34;17 - 00;14;41;13
Tracey O’Brien
And then the second category would be those states that permit non-compete agreements. But work restrictions.
00;14;41;16 - 00;14;47;03
Tom Godar
Walk us a little bit towards some of those and give us some insight into those states and how employers are responding.
00;14;47;05 - 00;15;17;16
Tracey O’Brien
Sure, there are four states that impose complete bans on non-compete agreements in those states are California, Minnesota, North Dakota and Oklahoma. With regard to these states, it's important for employers to focus on three primary issues. The first is the scope of the restrictions within the state statutes. The second is any additional obligations imposed on employers in those state statutes.
00;15;17;18 - 00;16;09;24
Tracey O’Brien
And third are the penalties that are for violation of the state statute. For example, in Minnesota, the Minnesota statute prohibits non-compete agreements with employer as well as independent contractors beginning on July 1st, 2023, but they do permit other restrictive covenants such as non solicitation agreements, trade secret agreements and confidentiality agreements. However, if an employer violates the Minnesota non-compete statute, however, there is a private right of action and employees who are successful in enforcing their rights under the Minnesota statute have a number of remedies available to them, including injunctive relief, damages and creating attorney fees.
00;16;09;27 - 00;16;44;12
Tracey O’Brien
California, however, has a long history of banning non-compete agreements as a matter of public policy. Despite that long history, they continue to enact additional laws imposing obligations on employers. And in 2024, they passed and enacted two laws which impose additional requirements on employers in Senate Bill 699 and Assembly Bill 1079, both of which were codified at the California Business and Professional Code, section 16600.5.
00;16;44;14 - 00;17;18;25
Tracey O’Brien
Under those statutes, California employers are precluded from including a void covenant in a contract, and they’re also precluded from attempting to enforce a void contract. In addition, in California, the employers must notify in writing former and current employees who are employed beginning on in January of 2022, that a non-compete agreement that they previously had entered into is now void.
00;17;18;27 - 00;17;24;09
Tom Godar
Stop there for a second, Tracey. Help us understand what you mean. They prohibited a void provision.
00;17;24;11 - 00;17;51;10
Tracey O’Brien
So that’s right. Time in in California, the California legislatures are concerned that employers are continuing to include in employment contracts a non-compete provision, which the concern is that the non-compete, even though they are void, will have a chilling effect nonetheless on employees and their choice of moving to new jobs.
00;17;51;13 - 00;18;07;29
Tom Godar
Yep, yep, sounds a little bit more like board law, which is I don’t care if you’ve tried to enforce this, if it’s in your handbook, if it’s in your policy, and it shows the opportunity for people to engage in collective, concerted activity, we’re going to find it a ULP but you have never disciplined or used it to curb that.
00;18;07;29 - 00;18;14;07
Tom Godar
So the same kind of idea, don't even try to put it in under some hope that maybe it’ll slow down the train.
00;18;14;09 - 00;18;36;10
Tom O’Day
And I think, Tracey, if I’m right, under California’s law, it is against the law to include any type of agreement or provision that would restrict that type of trade, a non-compete agreement, a non-solicitation agreement. And that’s pretty significant for the reasons that that you both articulated. I’m not aware of that any other state has that level of
00;18;36;10 - 00;18;37;14
Tom O’Day
prohibition.
00;18;37;16 - 00;18;47;29
Tracey O’Brien
I agree Tom. Non-solicitation and non-compete agreements are both prohibited in California. They do allow trade secret agreements and confidentiality agreements.
00;18;48;01 - 00;19;20;22
Tom Godar
Well, that has been terrific. Tom and Tracey appreciate that. But I’m going to stop this portion of the recording right now is part one and join the Labor Law Insider for part two. As we continue our discussion. Now, I merely on the state specific issues that people have to be aware of. And it’s not only just states, but within states, there’s all sorts of discussion as to how particular occupations or levels of payment or exempt nonexempt employees can be affected differently.
00;19;20;24 - 00;19;46;22
Tom Godar
And please join us as we move into part two to learn a lot more of the, well, the granular parts of non-compete agreements that you’re going to have to be aware of, depending upon your jurisdiction or your multiple jurisdictions in which you operate. But thank you so much, Tom and Tracey. We’re going to be hearing from you again in just a week or two as we publish our two of our Labor Law Insider dealing with restrictive covenants.
00;19;46;25 - 00;19;55;23
Tom Godar
And thank you, listeners, for joining us on the Labor Law Insider.