In recent months, we discussed the looming Federal Trade Commission (FTC) rule and likely vote to ban noncompete clauses in most employment contracts. The original rulemaking process raises concerns for Florida businesses that make use of these in their contracts. Current and future contracts would be impacted by the proposed rule.
After a delay in the public comment deadline earlier this year, Bloomberg News reports that a vote on the rule will not take place until April 2024. If a vote takes place in April, this would mean the rulemaking process took nearly three years from President Joe Biden’s executive order in July 2021 requesting that federal officials implement a ban. This long delay leaves business owners in the lurch as they wait for further guidance on how to proceed.
We already talked about alternative options for Florida business owners who want to get the same essential result as a noncompete clause without legally having access to these contract terms. As a refresher, your options include:
- Confidentiality agreements
- Anti-raiding clauses
- Non-solicitation clauses
With the delay, your business has more time to prepare for the possibility that the ban takes effect next year. We want to help you and your colleagues prepare for the eventual changes so you’re not left scrambling for new contracts and negotiating new terms with employees in 12 months.
Review Current Contract Language
Your first step should be to get an inventory of the current contracts you have employees signed to and the language within them. Most businesses should have “standard” contracts in place but those standards change over time.
Review each version of the standard contracts that each of your employees is currently working under. Do you have long-time employees that are on older versions of contracts that use old language that won’t work under the FTC rule? Is there unclear or updated language that all employees should understand and agree to?
Consider Standardizing Contract Language
The next step in this process would be to centralize all your contracts under a common language. If you have seven different versions of an employment contract then that’s seven different contract types you’ll need to update should the FTC rule be implemented.
Standardizing contract language and having all employees sign the “new” standard contract for your business streamlines this process. You only have one version of a contract to update if all employees are signed in the same language.
Ensure your employees understand the terms of their employment agreement are not changing and that this is just a clerical effort to standardize and modernize contracts.
Work with a Business Attorney
Preparation is key to surviving as a Florida business. At Bryant Taylor Law, we work closely with businesses of all sizes at various stages of business to ensure they have the legal tools and guidance to succeed. Contact our team if you’re in need of a business attorney in Florida.
Bryant Taylor
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