Trump Campaign Noncompete Agreements May Break Multiple Laws

You may have seen that the Trump campaign is imposing confidentiality and noncompete agreements on its staffers that are quite broad. Here's the agreement, posted online. It's a great example of what not to do. Let's take a look at what they did wrong for a moment.

Election law: The agreement is with The Trump Organization. If Wikipedia has it right, “The Trump Organization (formerly Elizabeth Trump & Son) is an American privately owned international conglomerate based in Trump Tower in Midtown Manhattan, New York City. It serves as the principal holding company for Donald Drumpf's [okay, so some John Oliver fan has been playing with the site, but I think the rest is correct] business ventures and investments.” So they may well be violating election laws here because it is the campaign, not “the Trump Organization” that should be hiring campaign workers. If they work for The Trump Organization, then there are some serious in-kind contribution issues going on. On the other hand, if they are being paid by the campaign, why is the campaign paying for legal issues relating to his family members? I wonder if the Federal Election Commission has already opened an investigation on this.

National Labor Relations Act: Onto the employment law issues, NLRB has been cracking down on non-disparagement agreements that seem to prevent or discourage criticism of management during employment, and this one does that. An example is Quicken Loans, Inc., 359 NLRB No. 141 (June 21, 2013), where an administrative law judge found that a similar provision would have a chilling effect on employees who wanted to discuss working conditions. The judge said the "line between lawful and unlawful restrictions is very thin and often difficult to discern." The judge found the agreement language violated the law and that prohibiting disclosure of "non-public information relating to . . . the Company's business, personnel . . . all personnel lists, personal information of co-workers . . . personnel information such as home phone numbers, cell phone numbers, addresses and email addresses" would hinder employees' exercise of their rights under the National Labor Relations Act.

Antitrust: I don’t know what level employees that The Trump Organization is imposing these agreements at, but there can be serious antitrust issues if the company has no legitimate interest to protect other than preventing competition. The New York AG has been going after companies imposing noncompetes with no legitimate interest. A good example is the Jimmy John’s case. The FTC and Department of Justice also have antitrust divisions that could scrutinize a noncompete agreement imposed solely to prevent competition. Here are some pieces I’ve written on topic:

Non-Compete Agreements Can't Be Used to Prevent Competition

Low-Wage Worker Noncompetes? Can You Say Antitrust?

The White House Wants Your Horror Stories on Noncompetes and Wage Collusion

I'm not the only one who has noticed problems with these agreements. For an excellent analysis of some legal problems with this agreement, take a look at Robert Teachout's piece on SHRM's website, Trump Noncompete Agreement Draws Criticism.

So if you're drafting a noncompete or confidentiality agreement, the Trump campaign's agreement is a good example of what not to do. If your employer's agreement looks a lot like this one, it may be time to get some legal advice from an employee-side employment lawyer in your state, because the laws on noncompete agreements vary from state to state.