Table of Contents

• EDITOR’S RAMBLE 🗣

• FEATURED REPORT 📰

• TOGETHER WITH BARBRI SQE* 🤝

• IN OTHER NEWS 🗞

• AROUND THE WEB 🌐

• STUFF THAT MIGHT HELP YOU 👌

EDITOR’S RAMBLE 🗣

Hey!

It’s “back to school” season, soon 😭 

As we’re approaching the new academic year, we’re recruiting for our Campus Ambassador scheme (it'll be a paid role).

So, if you like LittleLaw, and go to a UK, uni then fill out this form.

- Idin 

FEATURED REPORT 📰

🔒 The freedom to switch jobs

What's going on here?

In April this year, the Federal Trade Commission (FTC) banned ‘non-compete’ agreements (clauses that stop employees from joining competitors). The FTC is a US government agency which investigates and prevents unfair business practices.

But last week, a federal judge in Texas overturned the FTC’s proposed ban. The judge argued that the FTC exceeded its authority by imposing the ban like that.

What was the FTC’s proposed ban?

The FTC's ban would have stopped employers from putting in new non-compete agreements with workers — and even stopped them from relying on existing ones.

But the ban still allowed non-competes for senior executives, since they usually negotiate these agreements rather than having them forced on them by the company.

The ban was scheduled to take effect on the 4 September 2024.

Why did the FTC propose the ban?

The three main reasons that the FTC argued were:

• 🚫 Non-competes block workers from better opportunities.

• 💡 Non-competes slow down innovation by preventing new businesses and ideas from entering the market (as workers aren’t allowed to ‘compete’ against their current employers).

• 💸 Less competition in business, as a result of non-competes, harms consumers by limiting choices and keeping prices high.

Why was the ban overturned?

After the FTC decided to ban non-competes, Ryan LLC (a Dallas-based tax firm) and some other business groups (like the US Chamber of Commerce) claimed the FTC went beyond its powers. They argued that the ban would harm (not help) American workers and businesses.

Judge Ada Brown (a federal judge in Texas) agreed that the FTC had acted beyond its powers – it should only be making rules to help investigate unfair practices, not creating blanket bans like this.

Is the FTC likely to appeal?

Probably — Victoria Graham (a spokesperson for the FTC) said the agency will keep fighting against non-competes and that it’s seriously considering an appeal.

If they appeal, the case would be heard in a court just below the Supreme Court. Pro-business groups might push to have it heard before the US elections on 5 November – they think the current judges in the High Court are more likely to side with them.

How does the US position compare to the UK?

In the UK, non-competes (known as ‘restrictive covenants’) are only enforceable if:

1. they don’t go further than is necessary to protect a company’s legitimate interest, and

2. they’re not contrary to the public interest (for example, they don’t restrict a worker's ability to find work).

But the rules might get even stricter very soon.

Last year, the UK government suggested limiting non-compete clauses to three months to make it easier for employees to switch jobs. This change hasn't happened yet, and with a new government in power, it's uncertain if or when it’ll take effect.

So, like in the US, the situation in the UK with non-competes is still uncertain.

Why should law firms care?

Commercial law firms have employment teams that help clients draft employee contracts. These often include restrictive covenants or non-competes, especially if they’re for senior executives.

These teams need to keep up with the current law plus changes coming down the line to be able to give better advice to their clients.

For example, if that law comes into effect that limits all non-competes to a maximum of 3 months, then it’s better to plan for this ahead of time and be certain that the agreements are actually enforceable.

This way, businesses are still protected by the non-compete, and employees escape unreasonable restrictions on their ability to work — which is exactly how they’re supposed to work.

Credit: Laura White

TOGETHER WITH BARBRI SQE* 🤝

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• Their courses include what you need for the exam (nothing more and nothing less)

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IN OTHER NEWS 🗞

• 💸 Uber’s been hit with a €290 million fine by the Dutch Data Protection Authority for a GDPR breach. Uber’s accused of transferring European drivers' personal data to US servers without adequate protection in place. The data (including ID documents and location information) breached GDPR regulations. Uber plans to appeal, calling the fine "unjustified."

• 🛒 Shein (the Chinese discount retailer) is suing its rival Temu accusing it of counterfeiting, theft, and trademark infringement. This lawsuit is a new chapter in their ongoing battle for dominance in the discount shopping world. And the stakes are high, especially as Shein prepares for a potential IPO. Here’s a summary of the dispute plus an explanation of how both companies are using a tax loophole called ‘de minimis’ to make their products cheaper.

• 🧠 There’s a new US law protecting your brain-wave privacy. Earlier this month, a first-of-its kind law took effect in Colorado, which extends privacy protections to neural brain data. This is in response to a growing number of consumer tech products which use brain activity to do things (like improving your sleep) which were previously outside of any regulation. Privacy advocates hope Colorado's move could inspire wider regulations over brain data.

• 🧑‍💻 An A&O Shearman trainee sells AI start-up to Thomson Reuters. Thomson Reuters (a global market intelligence company) announced it has acquired Safe Sign Technologies. Safe Sign is a UK-based startup developing large language models specific to the legal industry. It was founded in 2022 by Alexander Kardos-Nyheim, a Cambridge university law graduate and trainee solicitor at A&O Shearman. And yes, it seems Alexander’s left the firm now.

AROUND THE WEB 🌐

• 🤣 Funny: Here’s why “I could care less” is wrong

• 🚨 Criminal: A woman in the US was jailed for breaking a restaurant’s “all-you-can-eat” policy — she shared food with her friends

• 📚️ Language: Vote for the most beautiful word in the English language (the current leader: “realistic”)

Credit: r/internetisbeautiful

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STUFF THAT MIGHT HELP YOU 👌

• 📹️ Free application help: If you're applying to commercial law firms, check out my YouTube channel for actionable tips and an insight into the lifestyle of a commercial lawyer in London.