What impact does a temporary layoff have on a company’s noncompete agreement with an employee on the employee’s return to work?

In general, noncompete agreements are legal restraints that prevent employees from competing against their employers during and after employment. Only three states in the U.S. (California, North Dakota and Oklahoma) prohibit the use of noncompetes. As a result of the ongoing pandemic brought on by the worldwide spread of the novel coronavirus (COVID-19), employers across the country and across industries were forced to temporarily lay off employees. Many of these employees were subject to noncompetes. According to a 2016 report by the U.S. Treasury Department, 18% of all workers are covered by noncompete agreements.

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