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FTC's Noncompete Ban Leaves Room to Prevent Trade Secret Theft

Bloomberg Law

  • January 24, 2023

Steve Carey, Sarah Hutchins, Tory Summey, and Zack Anstett explained in Bloomberg Law why “even if the FTC is successful in banning noncompete agreements, businesses still have options to protect their trade secrets when employees leave for a competitor.”

"Since the Federal Trade Commission recently announced a proposal to ban all noncompete agreements, clients have been asking, ‘What about our trade secrets?’ It’s a logical question, considering that noncompetes are one of the primary ways businesses protect these secrets,” they wrote.

“Employers don’t want their valuable information walking out the door with a departing employee,” they continued. “To protect against this risk, most noncompete agreements contain restrictive covenants. These provisions prohibit an employee from soliciting certain clients of the employer or from divulging and using the employer’s confidential information and trade secrets at their new job.”

“In addition to these contractual protections, employers rely on federal and state laws that prohibit theft of trade secrets,” they wrote. “States are increasingly viewing noncompetes with skepticism, with a few—like California, Oklahoma, and North Dakota—prohibiting their enforcement.”

Subscribers can read the full article here: FTC’s Noncompete Ban Leaves Room to Prevent Trade Secret Theft

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