Philadelphia partner David Woolf was quoted in a Law360 article titled “4 Noncompete Developments From 2018’s First Half.” The article discusses four recent developments in restrictive covenant law that attorneys should have on their radar.
David commented on the Department of Justice’s announcement in April that it had reached a settlement with rail equipment suppliers Knorr-Bremse and Wabtec over allegations of a long-running pact not to compete for each other’s employees. The announcement came as somewhat of a surprise to attorneys, who generally expected the Trump administration to pivot from its predecessor's enforcement priorities.
“From a lawyer standpoint, with the change in administration, a lot of employment ... rules were pulled or at least changed in enforcement priority,” David said. “It's interesting, because the DOJ came out in early 2018 and said, ‘No, we’re going to enforce this [Obama policy].”
The Obama administration said it would bring criminal charges against employers that violate its no-poach guidance, though the Trump administration filed its suit in civil court. But David noted that rather than the DOJ softening its stance, the settlement reflects that the companies abandoned their agreements after the guidance came out.
“What we're hearing is if they see [no-poach agreements] post-2016, they’ll bring criminal action,” David said.