“How Cos. Can Protect IP in Light of FTC Noncompete Rule”

In an article published by Law360 on May 3, 2024, Marshall Gerstein partner Thomas Duston provides practical guidance to businesses seeking to protect their confidential information and intellectual property despite recent FTC guidance suggesting that noncompete agreements could be a thing of the past.

Tom explains, “The rule will become effective four months after it is published in the federal register, an event expected to occur later this summer. While several groups have already challenged the rule in federal court, including the U.S. Chamber of Commerce, employers should begin planning other ways to protect their valuable trade secrets, confidential information, and other intellectual property.”

While the rule is up in the air, Tom suggests several steps businesses can take now, including compiling an inventory of noncompete agreements with current and former employees and any potential violations, restricting access to confidential information on a need-to-know basis only, and determining how to handle employees who fall under the “senior executive” category.

Lastly, Tom warns companies purchasing another to reassess critical employees of the new business who may continue to be bound by noncompete commitments following the acquisition.

Subscribers to Law360 can access the article "How Cos. Can Protect IP In Light Of FTC Noncompete Rule."