Oct. 9, 2024
What does an FTC ban on noncompete agreements mean for trade secrets litigation?
See more on What does an FTC ban on noncompete agreements mean for trade secrets litigation?The FTC has issued a nationwide ban on noncompetes, raising questions about its impact on trade secrets misappropriation cases. Despite the ban, trade secrets cases may not increase significantly due to the difficulty of proving disclosure and the need for heavy pre-suit investigation.
In a typical trade secrets case, a former employee who had access to confidential commercial information--such as processes, formulas, algorithms, or client lists--takes and discloses that information to a competitor.
Companies use noncompete agreements to mitigate the risk of harm when employees leave for competitors. These agreements prevent former employees from engaging in the same type of business for a specified period, increasing the likelihood that the trade secret becomes...
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