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Trade Secret Protection Plans Provide Certainty to Employers
Baker Donelson recently published an article called "The End of Non-Competition Agreements? Not so Fast!" The article summarizes the Federal Trade Commission's (FTC) final rule prohibiting most employers from binding the majority of American workers to post-employment non-competition agreements (Final Rule).
While the Final Rule's enforcement is expected to be delayed and will likely never take effect, the Final Rule itself is a good reminder that non-compete agreements in the employee-employer context are under more scrutiny than ever and in some states, like California, Minnesota, North Dakota, and Oklahoma, are already banned as a matter of law.
Other states, such as Colorado, Washington, Oregon, and Illinois, only allow employers to bind highly compensated employees to traditional non-competition agreements. Even in states that are considered to be employer-friendly in the context of non-competition agreements, judges are carefully reviewing non-competition agreements to ensure that they are reasonable in their duration, scope, and geography and are no broader than necessary to protect the employer's legitimate business interests.
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