The Restraint of Trade Contract Act: What You Need to Know
The Restraint of Trade Contract Act (RTCA) is a federal law that restricts certain types of agreements between employers and employees. The purpose of the law is to prevent employers from unfairly limiting an employee`s ability to work for competitors or start their own business.
Under the RTCA, any contract or agreement that places unreasonable restrictions on an employee`s ability to work is considered illegal. This includes non-compete agreements, which prohibit employees from working for a competitor for a certain period of time after leaving their current employer. Non-solicitation agreements, which prevent employees from contacting the clients or customers of their former employer, are also restricted under the RTCA.
While the RTCA is a federal law, it is enforced by individual states. This means that the specifics of the law may vary depending on where you live and work. Some states have more strict laws regarding non-compete agreements, while others may have more lenient restrictions.
It`s important to note that the RTCA does not prohibit all contracts or agreements between employers and employees. For example, a confidentiality agreement, which prevents employees from disclosing proprietary information, is generally considered legal under the RTCA.
If you believe that your employer has violated the RTCA, you may be able to take legal action. However, it`s important to first consult with an experienced employment lawyer who can advise you on your rights and options.
In conclusion, the Restraint of Trade Contract Act is an important federal law that protects employees from unfair restrictions on their ability to work. If you have questions about how the law applies to your employment situation, it`s always best to seek the advice of a qualified lawyer.