Noncompete agreements used to be a way that companies would try to protect their trade secrets. They knew that employees had to learn some of these secrets just to do their jobs, such as an employee who needs to know the recipe for a soft drink or the specific design of a new tech product. But by having these employees sign noncompete agreements, it ensured that they couldn’t take their knowledge and go directly to the competition.
However, the Federal Trade Commission has banned noncompete agreements. There are very limited exceptions, but they typically cannot be used any longer, and even noncompete agreements that were already on file may not be upheld by a court. This gives workers more freedom of movement to take whatever jobs they want within their industry.
Exploring other options
However, this doesn’t mean that trade secrets necessarily have to be at risk. Other steps may just be necessary.
For example, patents protect intellectual property even if it’s publicly known. An employee may have knowledge of how the new tech product is designed, but if it’s been properly patented, another company can’t simply steal that design and start making the same product. They’re legally prohibited from doing so, even if they know the trade secret.
Another example is using non-disclosure agreements. In some cases, employees may need sensitive information to do their jobs and may later go to the competition. But if they signed a nondisclosure agreement, it limits what information they are allowed to reveal to their new employer.
Protecting intellectual property is certainly important, and it’s crucial to know how to do it as the legal landscape changes.