In the article “Protecting Company Secrets After the FTC’s Noncompete Rule,” published in The Recorder, partners Adam Powell and Daniel Hughes offer practical takeaways for companies who are seeking to understand the changing legal landscape of noncompete agreements.
The article provides context on the Federal Trade Commission’s impending rule banning companies from using noncompete agreements, including exceptions to the rule and pending legal challenges to the rule. With the rule slated to go into effect on September 4, 2024, Powell and Hughes discuss how companies can prepare to protect their intellectual property without noncompete agreements.
The authors highlight the importance of other contractual restrictions, including “non-disclosure agreements and invention assignment agreements.” They also explain that companies should “pursue comprehensive intellectual property strategies for protecting their interests, including creating a strategic plan for protecting trade secrets.” The authors then outline the key components of a robust trade secret strategy.
Concluding the article, the authors write, “Though the rule may appear to be a major blow for companies who have previously relied on noncompete clauses, its effects can be mitigated […] If the rule goes into effect, companies are well advised to pursue comprehensive intellectual property strategies for protecting their interests, particularly when employees learn proprietary information that could benefit a competitor.”
Read the full article here.
