FTC rules on non-compete agreements across all 50 States

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On April 23, 2024, the US FTC issued a rule effectively barring most non-compete agreements across all 50 states. The very next day, the US Chamber of Commerce sued the FTC, alleging that the FTC exceeded the scope of its rulemaking powers. This battle will be interesting to watch!

Any restrictions on non-competes is actually a positive thing for the importance of protecting trade secrets. Non-competes are designed to prevent the movement of employees from one company to a competitor. They protect trade secrets, but only indirectly since it is hard for the trade secret to move without being carried by the employees.

Trade secret laws such as the DTSA (federal) and UTSA (state) provide direct protection for trade secrets. Additionally, trade secrets can be enforced at the ITC, preventing the import of products into the US that were developed with stolen trade secrets. Furthermore, trade secret owners can request that the Department of Justice and FBI initiate criminal investigations of trade secret theft, especially thefts involving international parties and technologies of high national interest.

Trade secrets continue to gain attention and traction in industry. 2024 is off to an interesting start for this increasingly valuable form of intellectual property.


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