Steve Carey, Sarah Hutchins, and Tory Summey co-authored an article in Corporate Compliance Insights about the FTC’s proposed noncompete ban and how businesses should re-evaluate the use of noncompetes.
"The FTC’s proposal to ban noncompete agreements has provoked an Edvard Munch-type scream from business leaders in essentially every industry sector," they wrote. "The reaction makes sense, as noncompetes have become a key part of many businesses’ strategy to protect themselves from loss of personnel and information to their competitors."
"If the FTC is ultimately successful in banning noncompetes — and that is a big “if,” as we will discuss below — other defensive options remain. Companies that are overly reliant on the protections afforded by noncompete agreements should take the time to reconsider their strategies even if the ban does not take effect," they wrote.
"Aside from the FTC’s current posture, a number of courts across the country are already more reluctant to enforce noncompetes," they wrote. "Some existing state-level legislation also targets these agreements, making other protective agreements and information practices critical in many areas of the country," they continued. "Further, as noncompetes become subject to more limitations, we anticipate competition litigation to increasingly center around other activity, especially trade secret misappropriation."
You can continue reading here: No Need to Scream: How to Protect Your Business in the Face of the FTC’s Proposed Noncompete Ban
Corporate Compliance Insights (CCI) is an independent news organization designed to educate and encourage informed interaction within the global compliance, risk and InfoSec community.