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Education

who will and will not be affected by the proposed regula- The digital payments and fintech sectors will be directly
tions. As the FTC pointed out, states like California, North impacted by these policy shifts, affecting both business-
Dakota and Oklahoma already have prohibited noncom- to-business relationships and employer-employee rela-
pete agreements, prompting businesses in those states to tions. The administration’s objective of slowing down the
find alternative means of protecting their confidential, consolidation of markets is clear, particularly in the highly
proprietary information. competitive and evolving field of digital payments where
numerous mergers have occurred. Consequently, EO 14036
In the payments industry, this is noteworthy as California and these proposed policy changes in employer-employee
serves as a major technology hub and houses some of the relations will undoubtedly affect growing companies that
country’s largest banking institutions. seek to protect their trade secrets.

As to the propositions themselves, on a nationwide scale, Even if the FTC’s proposal is not adopted and the NLRB
the NLRB’s opinion would have a narrower impact com- doesn't adopt its general counsel’s opinion, there is a trend
pared to the FTC’s proposed subchapter j. Specifically, the toward more federal regulation of the employment rela-
NLRB’s opinion pertains directly to Section 7 of the Na- tionship. It is in employers’ best interests to prepare for
tional Labor Relations Act, which applies to nonsupervi- potential changes and explore state-level legislation where
sory employees in all private employers. Workers not cov- anticompetitive practices are already unenforceable. This
ered under Section 7, such as supervisors and independent will enable them to find alternative means to protect their
contractors, would not be affected by the NLRB’s opinion. investments in trade secrets and other business practices
without relying on non-compete agreements.
The FTC’s proposed subchapter j would have a broader
application. As proposed, it would apply to any person Matthew D. Luciani is an associate at Global Legal Law Firm who works
defined under 15 U.S.C. § 57b-1(a)(6), which encompasses
natural persons, partnerships, corporations, associations on out-of-state litigation cases. Before joining Global Legal, he attended
or other legal entities. Consequently, subchapter j would Ave Maria School of Law, where he served on the Finance Committee.
apply to almost all employers, with a narrow exception He also worked for a trial law firm focused on employment and estate
carved out for persons selling a business entity. litigation. For more information please contact Global Legal at info@
attorneygl.com.

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