For a lot of our small business owners, we've got good news: noncompetes are legal again. Today we interview John Sauer, attorney and expert on business law. John and Nate discuss the legal implications of a sudden direction shift legalizing popular agreements employers sign with key employees; and stay for the end when they discuss the future. Is this a new era in American Law, where judges are kings? Find out their opinions. As always, it is good to have an expert on your side. 00:03 FTC ban on non-compete agreements is struck down by the Ryan Court 00:10 Chevron deference 14:30 Marbury vs. Madison 18:00 an ever-expanding government, is this era coming to a close? 21:00 cold comfort…now appointed judges have “power of kings” 25:00 litigation is going to explode As a quick reminder, the Expert Network Team provides free consultations. We would love the opportunity to be of service to you or someone you care about. Just scroll the liner notes to contact one of our experts or today’s guest. And please share this podcast with anyone who you think might find it interesting. —
Audio file
103 nocompetes are legal again.mp3
Transcript
00:00:03
Welcome to the expert Network team podcast.
00:00:21
I think maybe for a lot of our small business owners, we've got good news, non competes are legal again today we interviewed John Sauer, attorney and expert on business law. John and Nate discussed the legal implications of a sudden direct.
00:00:35
Shift legalizing popular agreements employers signed with key employees. Again, make sure to stay for the end when they discuss the future.
00:00:44
Is this a new era in American law where judges are kings? Find out their.
00:00:50
Opinions.
00:00:51
As always, it's good to have an expert on.
00:00:54
Your salary.
00:00:58
Welcome to today's podcast. My name is Carl Frank, and this is the expert network team. And with me in the office today is John Sauer from Goodspeed and Merrill attorney at large. How are you?
00:01:10
I'm doing good. Thanks for having me back, Carl.
00:01:12
Hopefully good to see you, my friend, and and not to be forgotten also on the podcast, but far, far away from us is Nathan Merrill in the land of college kids. How are you, my friend?
00:01:23
I'm doing really well. Thank you very much and not my alma mater campus, but dropping off the kid is always a fun thing.
00:01:31
Yeah, that is so exciting. And how's she doing?
00:01:35
She's doing pretty well. She's got a little bit of those jitters, but we met her roommates. She's living on campus, and then we met her roommates and she's paired up with another piano major in her room, so I'm sure there's gonna be lots of musical banter and chatter and.
00:01:52
It'll be great. She'll do really well.
00:01:54
Yeah, that's so.
00:01:55
Exciting. Oh, my goodness. Our music major. Amazing.
00:02:00
Yep, good for you, man.
00:02:01
And then the other, the other two start back up next week. I'm sure everybody else who's got college kids this time of year, everybody.
00:02:08
Is dealing with the same stuff, but I'm I'm right in the middle of the move with my oldest married with child moving back into married student housing. So that's been fun.
00:02:19
That's exciting too, and you're helping.
00:02:22
Yeah, because they spent the summer in Denver and consulting firm. So just at the time we left Denver, they arrived and so.
00:02:32
There's back in trouble.
00:02:32
You just.
00:02:34
So this is the Nate Merrill moving company.
00:02:38
Is this an LLC? Is this some sort of a separate business we should file with the federal government may.
00:02:44
Three sons in a truck or whatever, you know.
00:02:48
Is that you? That's your company, OK.
00:02:49
Yeah.
00:02:52
OK, I love it. Well, hey, this is going to be a fun topic because I think maybe for a lot of our small business owners, we've got good news and and it's certainly something that you know as a client of both of yours as a client of your law firm, good speed and Merrill, you guys helped us create non compete agreements for our group of people here who are really important to us.
00:03:15
And and our clients and and and we want to protect everybody involved. The people working in the company as well as our clients and confidential.
00:03:23
Really, etcetera. And so a recent ruling seemed to upend all that and then add a more recent than that. It looks like that upending has been reversed. So we're excited to get the expert 1 of Colorados experts on this is John S Goodspeed Merrill and and John, tell us what's going on, man.
00:03:44
So we did an episode on this a couple of weeks ago because there was enormous panic even amongst our firm clients, about a rule that was issued by the FTC that basically.
00:03:56
They would ban non competes nationwide with some limited exceptions. That's an agency action by the fair, the Fair Trade Commission and the FTC basically said, look, we have the authority under the Statute to bar things that.
00:04:17
Our anti competitive and so we're going to bar non competes.
00:04:21
And it was a very general rule. It's actually really surprising how broad it was. And as is the case, litigation exploded out of that. The primary case that came to be was the Ryan LCV Federal Trade Commission. Everybody thought on the front end of that case that the federal judge down in Texas would issue a nationwide injunction. And then this issue would make its way through the courts and that the Supreme Court would strike it.
00:04:46
You know, and surprisingly about the time that we would, we did that podcast. The judge in that case basically issued an order.
00:04:53
Saying I'm just going to enjoy the impact of this rule. As to the litigants only, which caused an enormous amount of frustration for lawyers like myself because we were put in basically a holding pattern. The rule had a lot of requirements with respect to notification of current and former employees that may be subject to a non.
00:05:13
To be this now no longer enforceable and some other provisions that require compliance by September 4th.
00:05:21
When the Ryan court issued their decision, saying, we're just going to join this as litigants only, it said we'll get back to you on the rest of the issues in this case effectively by August 30th. So I was anticipating what is today the 28th.
00:05:35
We're pretty close. I was anticipating frankly.
00:05:39
Getting in position to have all of my clients as of August.
00:05:43
Just 20th with you know, the toolkit in hand so that they could do the audits that they needed to do, so they'll be in compliance.
00:05:52
By September 4th.
00:05:53
And then as I was working on the toolkit, we were about to, we were about to send it out, the Ryan court issued its decision about 15 days.
00:06:03
Earlier than anticipated and said the FTC rule, we're issuing a nationwide injunction for everyone that TC Rule will not go in effect on September 4th.
00:06:15
And everybody breathe a sigh of relief. My phone was exploding. I mean, I've got lots of friends that are lawyers and everybody tries to beat each other to.
00:06:24
The punch and the.
00:06:25
Only thing that I could find because I didn't have I didn't have my computer with me because and I couldn't get to pacer.
00:06:30
To look up.
00:06:30
The order myself, the only thing I could find was.
00:06:33
Like a tweet of somebody saying.
00:06:35
Ryan Court nationwide injunction, FTC rule, and so we immediately had to revise what we're going to do for a blast to basically.
00:06:44
Be, you know, sigh of relief like rules not going into effect. I told you guys, calm down. And so here we are today. Now that decision is going to be appealed and then that decision will be ultimately I would be surprised if the Supreme Court did not grant Cert and hear the case.
00:07:05
But it's this this session with the US Supreme Court has been pretty interesting because.
00:07:14
And the way that these agency decisions are made.
00:07:17
You know the FTC, the DOL, you know these federal agencies have these under underlying statutes that empower them to regulate in these different spaces. And what we've seen in this last session really is the Supreme Court putting more checks in place on administrative agencies from basically.
00:07:37
Legislating through agency rulemaking.
00:07:41
But that's really where we're at, is.
00:07:42
We're going to see.
00:07:43
This issue get pushed all the way to the.
00:07:45
Supreme.
00:07:45
Court and like I said in the prior podcast, I don't think that there's a chance that this rule will ever take effect on a nationwide level, at least in, you know, in its current form.
00:07:56
So if you handicap it, you don't think that that non competes are going to be nationally nationwide illegal.
00:08:04
Sorry.
00:08:04
You think this will never happen? It's kind of Much Ado about nothing.
00:08:08
I think it will.
00:08:08
Be left to the states to regulate.
00:08:11
Left to the States and some of the states already are making it illegal. Like understanding California, it's illegal to have a non.
00:08:16
Compete. There's limited exceptions for pretty much every state that does look at this issue, but those limited exceptions you know.
00:08:25
They're very limited. Colorado is, I would say, California is #1 Colorado, maybe #2 are tied for number 2 with some a few other states that really do not like non competes.
00:08:40
Well, John, something I want to explore here and I know this kind of gets into speculation and that sort of thing.
00:08:41
So.
00:08:48
But.
00:08:49
Kind of like when the Biden administration student loan forgiveness.
00:08:54
Got knocked down by the Supreme Court or by the courts. They just tried to back door a different way. Do you see there being a back door for the FTC to?
00:09:04
To come into this and approach it from an angle that the court might have left open as a door.
00:09:11
So the primary question and the underlying decision in the Ryan case that's getting appealed is whether the FTC actually had the statutory authority to regulate in this space. The Ryan core answered that question. No, the FTC does not have authority to regulate in this space based on its its statute and.
00:09:31
From there, if the FTC, if the appeals court answers that question, no, which they likely will, and the Supreme Court answers that question, No, then there's not really a back door to get this rule imposed in the way that it's been basically litigate.
00:09:47
So I don't. There's really. I mean, I can imagine another rule being proposed in the future that under potentially other parts of the FTC act. I mean that's kind of the the the deep brain thinkers perspective is that this the underlying basis for this.
00:10:07
Rule was not supported by the statute, the statutory provision that was cited, but there may be another statutory provision that would support it. I mean, and it goes kind of back to this game of semantics or non competes inherently anti competitive or do they actually increase competition?
00:10:27
From that perspective, I think that there may be some opportunity for for federal legislation on this in the future, but I don't think that first of all, it's going to withstand judicial scrutiny if it's just an agency, it, if it's an agency issued rule. So if Congress came in and said, yeah, we don't like non competes.
00:10:47
We're going to issue a A congressional rule that becomes law that non competes are banned nationwide. Then sure, we can have that. But I I think that the real problem here.
00:10:56
Is that?
00:10:58
We have a we have a federal agency that is trying to put in place one of the most impactful rules to businesses that that we've seen in in many years as in the employment space specifically.
00:11:11
Well, let's you mentioned or made reference to this a little bit. So let's spend a little time on this Supreme Court this particular.
00:11:18
This most recent session has been an interesting one and another.
00:11:24
Another case that may have may further impact this, as well as other Regulatory agency issuing regulations. You want to speak a little bit about Chevron or the case that supposedly overturned Chevron and maybe a little history on Chevron as well?
00:11:43
So.
00:11:45
Chevron. I had to go back to my.
00:11:46
Law school books.
00:11:47
To remember all of this stuff, but.
00:11:51
I just understood it innately that if an agency issues a rule.
00:11:55
Interpreting its statute, if that's if that's effectively reasonable interpretation of the Statute, because there's some ambiguity. Of course, going to uphold it. Not a lot of.
00:12:07
Regulations get struck down because Chevron deference requires a lot of move to establish that the agency interpretation of its enacting statute is ambiguous, and that the agency's interpretation is not reasonable so historically.
00:12:27
Chevron dumpers came out in 1984, so as far as I'm concerned it's been in effect all the time.
00:12:35
It basically says.
00:12:36
As long as a agency has a reasonable interpretation of its statute in terms of what it's doing in, in enforcement actions and in regulation, the Court is is restrained from reviewing or substituting its own judgment for that of the Agency.
00:12:55
The idea behind Chevron really was that judges are not experts like, you know, a federal judge sitting here in Colorado could hear any variety of cases from death penalty cases to Rico cases to, you know, you know, deep trade secret cases, cases under the EPA, you know, small.
00:13:14
Provisions of the Clean Water Act, all kinds of these, you know, very technical regulation, regulatory issues and the idea behind Chevron was.
00:13:25
Our government is set up in such a way that we create experts in these agencies to regulate and it should not fall to the federal judiciary to try to become an expert, you know, in migratory birds for purposes of trying to determine whether the enabling statute for these different agencies is being correctly followed or not.
00:13:46
Let's just give those agencies deference. We'll set the standard as reasonable. There just has to be a reasonable connection between what the agency is doing and their interpretation of their of the statute to enable them to do that. So Chevron stood.
00:14:02
Basically, from 1984 until earlier this summer, and there's a case that came out, it's the looper or Loper bright decision. The Loper bright decision without getting into the facts basically held that.
00:14:22
It basically rejected the underlying thought from the Chevron Court that judges shouldn't have to become experts in these topics, and there was actually a quote and I thought you liked this mate.
00:14:40
There's a quote in here.
00:14:42
From Marbury V Madison. So if you go to law school, the first case you ever read in constitutional law is Marbury versus Madison. And what that case does is sets out in many ways a framework for American constitutional law. This the, the Constitution is supreme judges jobs.
00:15:03
Are to interpret what the law is and and say what the law is. So the quote from Marbury versus Madison that showed up in the the the local right decision is.
00:15:14
It is emphatically the province and duty of the Judicial Department to say what the law is, and that was relied upon.
00:15:22
OK.
00:15:23
In the the Loper bright decision to basically establish that these agencies are not courts, but they're interpreting these statutes to figure out what the law is. When there's ambiguity that's not right from the from day one, Marbury versus Madison, it is the courts job to figure out what the law.
00:15:42
Is and so now under Loper Bright you have a.
00:15:50
You have courts now have the opportunity to actually substitute their judgment for that of the agency in terms of determining what the authority of the Agency is under their enabling statute.
00:16:01
What's going to come out of that, I think is going to be it's fairly exciting to see, but the I think one of the primary issues that and and and these issues like everybody, there's always the sky is falling, the sky is falling, the sky is falling.
00:16:17
Every all the commentators that I follow on the upper right decision overturning Chevron says.
00:16:25
They they essentially say we need to show a little bit of restraint here because it didn't say that Chevron is gone forever. It didn't mean it doesn't mean that federal agencies are eviscerated. It doesn't mean that federal agencies, authorities eviscerated. There's a number of things that are not impacted for federal agencies like fact finding investigation and forcement actions.
00:16:44
This this this narrow issue of whether they can actually do what they say, what they are reporting, that they can do, and whether a a judge can challenge that.
00:16:55
So let me just say one more thing and I I think that we can talk a little bit more about this amongst ourselves. But I'm a litigator, right? And as a litigator, what I do is I evaluate the facts, I evaluate the law, and I pursue a case.
00:17:07
For a client.
00:17:10
It takes a long time to get through all of the thoughts of ways to pursue a case before I, as a litigator, say, all right, well, it looks like you're going to lose. You're going lose. You're going to lose. Why don't we try to challenge the underlying statutory authority for this regulation?
00:17:32
Before I never did it and the reason I never did it is because Chevron deference was agency gets deference as to their interpretation and regulation and the wage hour space is is very important because the FLSA is pretty bare bones. But when you look at the regulations that have been promulgated by the DOL, they're extremely detailed.
00:17:51
As to what needs to happen, well, now with Loper Bright, I have in my tool bag all of the regular tools, but now I can also evaluate whether I think that there's the ability to convince a court that the agency is that it should substitute its.
00:18:12
Analysis for for the agency and its interpretation of their authority to kind of go down any of these particular paths and regulating.
00:18:23
Yeah, I had a thought on that. Just escaped me, but I want to go.
00:18:29
Back to a little bit the.
00:18:34
The the whole concept of the expertise of the the regulatory bodies kind of defining what their authority is.
00:18:43
If you could speak a little bit to perhaps the the origins of, well, maybe you did already. The origins of this, but the idea.
00:18:54
That.
00:18:55
The.
00:18:57
It's the expert rule.
00:19:01
Kind of the Progressive Era of the Wilsonian idea that the experts, the bureaucrats are best suited to determine what the people need, that you had the legislators. Ohh, I remember. I was going to ask. Now it's kind of this whole concept of and the Regulatory agency under this Statute shall promulgate rules to further kind of elaborate this Statute.
00:19:21
So the the statutory drafting as you pointed out got a little thin because.
00:19:26
It was hard to pass laws, and so the more ambiguous, in some cases the law could be and shift all of the legislative work over to the agency.
00:19:38
And then that's where we've had the agency bodies kind of run amok and just grow.
00:19:43
So.
00:19:44
Exponentially and take over essentially what government is, is that one of the things that's going to kind of be impacted here is the legislatures are going to have to start to legislate again and be a little more specific.
00:19:59
Absolutely. And you know, I think the you put a very good pin on this. They in the sense that.
00:20:06
You don't often see the scope of power for one of these regulatory agencies shrink. What you see is them expand and as a result of these decisions, you will see. Honestly, I believe you're going to see through litigation and other challenges and maybe even revision by other, you know, agency heads that come in and say, yeah, we've been doing this, but.
00:20:28
We have no real basis and we're going to lose a lawsuit on this and the agency power at that level is certainly going to shrink.
00:20:35
And then it is going to become. It's going to become incumbent upon.
00:20:39
Legislators, to be specific, provide additional detail as to what the what the authority of these particular agencies is so that they can go out and continue to operate in the way that they currently do. It's a it's it's very difficult to really say.
00:20:59
How how much of this is how big of an impact this is going to have because.
00:21:06
Regulatory agencies run our lives from a day-to-day.
00:21:11
Prospect, I mean, your tax attorney deal with the IRS every day I deal with the IRS. You know, a couple times a year through paying taxes, they're making their own rules. They're making their own regulations that that DOL and the FLSA rules.
00:21:27
Everything in your day-to-day life is dictated by not, not laws passed by Congress, but laws passed by regulatory agencies that go through what is kind of.
00:21:37
A.
00:21:38
Up as all rule making process in the sense that they're not, it's not representative government, it's the, you know the idea is.
00:21:46
These are these people are the experts. These are the, you know, the savants that can dictate how American life should work. And we're going to trust them under the Chevron deference standard. And now that we no longer have Chevron deference, we have. OK, maybe we have judge kings rather than agency kings.
00:22:05
But at least there's an opportunity.
00:22:05
Well, certainly the yeah. Well, certainly the appointment, the, the role of judiciary has now just exploded even further beyond its importance. Before this, the the Senate Judiciary and the confirmation process and how many judges get appointed by different administrations is going to drastically impact this.
00:22:25
It may be cold comfort at the end of the day is what it sounds like as we may move from agencies being run by administrations to judiciary legacies appointed by administrations kind of dictating the outcomes is what it sounds.
00:22:39
Yeah. And I I have, I have kind of a mixed bag of feelings on this. Like, do I trust?
00:22:45
Just just trying to look at looking at it from my own life, do I trust?
00:22:50
A judge to try to make a decision in interpreting the way things should be. Or do I trust an agency that has extraordinarily specialized, highly trained individuals? You know, making rules in this space? Which ones better? And I think that that's a hard question.
00:23:07
Well goes.
00:23:08
It goes back to your Marbury versus Madison, I believe. I mean, again, a landmark decision establishing the concept of judicial review that the courts do have the authority to determine what the law is. But I believe the other element and correct me if I'm wrong on this of Marbury, is judicial restraint is they basically said we have.
00:23:28
Damn an authority to determine the law is. But there are some things where we just can't act and.
00:23:32
This is one of them, so maybe that's judicial restraint becomes reinvigorated, which is to say, yes, the courts have the authority here, but we don't have to act in every instance.
00:23:44
Yeah. And that's, yeah. I mean, that's a great point. And one of the things that just generally speaking a court is called upon usually to answer a very specific question, was this person's rights violated? Was this rule filed? What followed was this contract followed, you know, did these people act in accordance with their, you know, common law?
00:24:04
Duty of care. Those are very specific questions that are very fact specific.
00:24:09
What you talk about these agencies, what they're doing is they're basically charged with.
00:24:15
OK, Clean Air Act. We've got to figure how to make the air clean. And that is a big problem. And so I think that from the perspective of trying to solve a big problem with an agency that that seems to be a little bit more effective in my mind than let's.
00:24:31
Just attack every single thing with different lawsuit, different set of facts, and pursue it in that way.
00:24:37
You have any questions?
00:24:37
Well, you bring up.
00:24:39
Yeah. And I think Chevron was an EPA case, wasn't it protect agency. So this this is I think perhaps where some of this sky is falling panic comes into play is the EPA of all the agencies I think has had a very liberal and expansive reading of its of its statutory.
00:24:42
It was.
00:24:57
Mandate even to the point of regulating the, you know, our expiration carbon dioxide, right. And that is probably causing some panic within ranks of people who would like to see that agency be able to reach into everything through carbon emissions and carbon dioxide, which isn't clear, I think.
00:25:17
From the underlying, you know, statute that that's within the purview of the EPA's authority, they've been given deference under Chevron to to venture out that way. But that may be beyond the scope of this this particular discussion. But I think that's one of those places where we could see dramatic upheaval if.
00:25:37
If.
00:25:38
Legan start taking it that way, yeah.
00:25:42
One of my close friends just asked me right after the the Looper bride decision.
00:25:47
Came out, he.
00:25:48
He asked me if he if I.
00:25:50
If he wanted, he.
00:25:51
And I wanted to start an administrative law law firm, so we would just go and challenge all of these rules and regulations on their underlying.
00:26:00
Premises, whether the agency actually had the authority to do what they're saying they do.
00:26:06
And so I'm not doing that, Nate, but it's because there's.
00:26:09
Yeah, I was gonna say that's a pretty cool thing to.
00:26:11
Say right now, that's cool.
00:26:12
But it it is a it is a I'm not doing that but it it is an underlying.
00:26:20
Underlying belief that's in line with what you're saying is that litigation is going to explode in these spaces and there's a lot of money to be had.
00:26:29
For lawyers, and I'll tell you, it's always surprising. I guess it's probably no longer surprising to me, but lawyers are very effective at making sure that they will always be needed, always be necessary in some capacity or another.
00:26:43
As a client of lawyers, yeah, that sounds that rings true. That is really.
00:26:48
Three things you can count on death, change and taxes. That's why I do what I do.
00:26:53
That's that's.
00:26:55
And lawyers are messed.
00:26:56
Up in all of them, all three.
00:26:58
Of those things.
00:26:59
A lot of law.
00:27:01
But the highest levels of non lawyer listening it's really. I think there's some really profound impacts of.
00:27:06
Of of the Chevron being possibly completely eliminated and then concerns about the power moving out of the agency into the judges. And it sounds like we're not all it all clear. Like there are, there are still concerns, right in my in agreement that that the judge came that, you know, the Supreme Court justices.
00:27:27
Said that, this was a big problem that the.
00:27:29
The you know the the judges are now the king, that we might have some concerns about that or or are we or is it really that is it? Is it really true that companies have run amok and we need more regulation or is it the other way around that the regulators have gotten so big, they're so out of control that we need to rein in their power? Or are we just creating a third problem?
00:27:35
Well.
00:27:50
But now the judges are this going to start running out of control.
00:27:54
Well, This is why I brought up the judicial restraint too, because here fundamentally, judges have no enforcement capability. They determine what the law is, and then it requires Technic.
00:28:04
This is where Brownlee board was a little different in the whole judiciary history, but.
00:28:09
Technically, the judges don't have the ability to rewrite the law. They just say this is not lawful.
00:28:17
And so they still require the balanced implementation or execution by the other branches of government. It either goes back to the legislature.
00:28:25
To get it right.
00:28:26
Or it takes the executive branch to to fix whatever it is they were doing and and This is why I say when we look at what the Court has done with a couple of the Biden administration.
00:28:37
Attempts to.
00:28:39
Go beyond their legal authority.
00:28:44
They do it anyway, or they keep trying to do it anyway and and then another all they have is this injunctive power. They just they can just stop it, but they can't create new laws. So I don't think there's any issue of King's coming from the bench. They don't have enough positive authority to actually reign from that position.
00:29:04
But.
00:29:06
But it would be great to see the legislative branch reassert itself a little here. I think we have had a history in the last 30 years or so.
00:29:14
Probably more like 80, but at least in the last 30 of massive agency creep. So to be able to pull that back. That's my opinion. But to be able to pull that back and balance out our branches of government again would be, I think a great thing for our country. But I want to take this back just real quick, John, to the the original topic which was the non compete.
00:29:30
Yeah.
00:29:36
Well, now the.
00:29:37
This ban or this injunction is in place and we don't see it going. What is the prospect of which our clients take away in terms of what they can do.
00:29:46
Refer them back to perhaps the Colorado discussion of what is.
00:29:51
Possible within Colorado and what is not?
00:29:55
So yeah. So and I say this every time, but there's this giant misnomer out there that non competes are illegal everywhere and I get this call all the time from people saying I need to. I need to deal with my employees. What kind of employment agreements can I have? I know I can't have non competes like hold on, hold on, hold on. Alright.
00:30:13
So it depends, non competes are.
00:30:18
Almost exclusively regulated by the states, so whatever state you live in primarily work in is the state in which or the where the employee works. Is the law that would apply to potential, not compete. So in the state of Colorado, you can have a general non compete with an employee so long as they make 120 three $750.
00:30:40
Per year, their anticipated annual salary is about $123,000 a year. There's some other limited.
00:30:47
Actions therein, but generally speaking, that is the case.
00:30:52
You can have a customer non solicit which in Colorado is treated as a non compete and that's what most employers want to have anyhow. They're not so worried about somebody going and working at their competitor, they just don't want them taking their current customer base.
00:31:07
And there's a lower salary threshold, so statute says that's 60% of what the other number is. And that turns out to be $74,250 annually. That someone that has to be expected to make for you to have an enforceable customer non solicit.
00:31:22
So there's a lot of ways as it currently stands to have non competes under Colorado law, even though we're one of the more restrictive laws, there's some notice requirements, there's some other pieces that need to be followed very carefully with this. But we draft non competes every day for clients we enforce non competes regularly for clients we defend.
00:31:43
Employees or individuals that are being pursued for non compete. So we spend a lot of time in.
00:31:47
This space so.
00:31:50
In other states, it's a lot more. It's a lot looser on what you can enforce and what you can't enforce.
00:31:57
And I I would go back to the overall topic of this FTC rule. What's going to happen here and it kind of goes to what your question was about my thoughts on kind of agency authority.
00:32:13
One of the things that I I have been quite frustrated with is the the gridlock that you see in Congress and the inability to actually make meaningful progressive change. Whatever your politics are, there doesn't seem to be any consensus on passing laws.
00:32:34
And from that perspective, one of the advantages of having agency deference is that you don't get that level of gridlock. So you. So if you confront a problem, it's not like you have to go through Congress. You have to get a lobbying group. You have to get a new law passed. All those things that's do you have an agency that's able to act more quickly than than the legislature.
00:32:56
Umm.
00:32:57
One of the things that this FTC will has opened up is this conversation at this level where I would not be surprised if we saw more states saying, well, if the agencies can't do it, we need to do something and now it's going to be much more regulated space at the state level.
00:33:18
Yes.
00:33:18
And generally speaking.
00:33:21
You know the politics of states tend to be a bit more consistent than the politics in Washington, DC, and you can get something fairly aggressive through General Assembly in the state of Colorado for regulation of non competes and there is an enormous amount of support in this state for those ideas that tend to believe that.
00:33:41
Those people tend to believe that a non compete is effectively punitive on a person and what you should be using or other provisions that have equal force.
00:33:54
For enforceability like confidentiality, trade secrets and you know other controls within your business to make sure that the wrong people don't, you know, try to ruin your business.
00:34:05
Yeah.
00:34:06
Well, and I love, you know, this may surprise you, but I love the idea that it comes back to the states, the states.
00:34:13
I think the Founders believe that the state governments and local governments would be able to be more responsive. Like you say, trying to corral 535 senators and representatives into a common belief is.
00:34:25
Possible, but I don't believe they intended that to be easy and that's why we don't have national rules. By and large, we are a nation of states, and the more that this returns to the States, I think the better for business, at least small business. You know the type of businesses that we all deal with would be much better served by.
00:34:46
A state level response government then trying to.
00:34:51
Be governed by New York and California. That's my view.
00:34:56
Great, great conversation, really good insights. I have nothing else to add on that. I think a lot of our listeners would prefer to deal with less government, not more, but we'll see how this plays out and and that's a pretty big deal because it looked like something was going in one way and then all of a sudden, Wham, it went in another. That's like the story of 2024, isn't it?
00:35:18
Well, I and I think this is going to give us something to talk about for a.
00:35:19
Big me.
00:35:21
While I mean this.
00:35:23
Like we were talking about before this this reversal, Chevron deference has given will give seed to a lot more activity I think.
00:35:33
Lucky you. Your firm's going to grow.
00:35:38
I have a good lead on somebody that wants to do administrative law on date, so if you want to, we could get.
00:35:43
An offer out. We should we should talk.
00:35:48
No, seriously, love it.
00:35:49
Very good. Could be really interesting. You guys could become experts at it. I.
00:35:53
Like it?
00:35:55
Well, this is a good conversation, John. Thank you so much. Thank you so much for having me, Nate. It's always good to see you. I hope I.
00:35:58
The first.
00:36:01
Get to see you in personally these days.
00:36:04
Yeah, I'll be back in middle of September and middle of October 2nd week of both September of October. So we'll have to see if it lines up.
00:36:12
Let's do it. All right, my friends and all of our listeners create another beautiful day. Bye bye.
00:36:18
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