The Federal Trade Commission has (expected appeals aside) pretty much ended the use of noncompete agreements in the future.
Given that one out of every five workers in this country is covered by a noncompete agreement, that’s roughly 30 million employees who will suddenly have the freedom to jump to an employer’s competitor (or become new competition in the field on their own).
If you’re an employer, what does navigating the new rules entail if you still want to protect your company’s proprietary information? You have to look at other options. These may include:
1. Increase your access controls and monitoring processes
Stressing a “company culture” that prizes security and limits access to intellectual property, trade secrets, client lists and more is going to be more important than ever. You may need to implement new access controls to keep tighter controls on authorized personnel – and monitoring and tracking the use of IP within your organization can help detect unusual activity.
2. Turn to non-solicitation agreements to keep poachers away
If you work in an industry where you have employees with specialized skills or client lists that are highly selective, you may need non-solicitation agreements to keep a former partner or employee from actively “poaching” your best people or customers.
3. Use non-disclosure and other confidentiality agreements
You can’t rely on a noncompete agreement, but you can require your employees, contractors and business partners to sign non-disclosure agreements (NDA) that will protect your sensitive information. These will allow them access to the information they need to do their jobs but prohibit them from revealing it to another employer, even after they leave.
In the wake of the new FTC ruling, it’s more important than ever to have experienced legal guidance as you seek to protect what you’ve built.