Protecting Your Business in Light of the Federal Trade Commission’s Proposed Ban on Non-Competes
When you own a business, you are only as protected as your trade secrets are. That is why you should pay close attention to the Federal Trade Commission’s (FTC) recent proposal to ban non-competes in most contracts. On January 5th, the Federal Trade Commission (FTC) issued a Notice of Proposed Rulemaking that, if implemented, would functionally prohibit any employer in the United States from entering a non-compete clause with their workers.
For decades, non-compete agreements and provisions have been a cornerstone of business security, ensuring that employers and business owners are not subject to their trade secrets being circulated without their consent. However, in recent years the practice of entering into non-compete agreements has come under broad scrutiny, leading to conditional prohibitions of the agreements in states including Maryland and Oregon and full bans in states including California and Oklahoma.
The FTC’s newest proposal will take these limitations further by imposing them on all businesses throughout the United States. Should it go into effect, it will not only prohibit non-competes from being enacted, but it will nullify any existing agreements and require businesses to issue formal letters of rescission to all impacted employees. This applies to current and former employees who have been bound by a non-compete agreement.
Though unlikely, even if this proposal is thrown out, we recommend that businesses and employers find and utilize alternative protective measures to limit reliance on non-compete agreements. The continuing increase in scrutiny of non-compete agreements is predictive of an impending invalidation of those agreements, whether now or in the near future.
It is imperative that businesses make plans and create systems outside of non-competes for protecting company information, especially in the case of employees transitioning out of the business. Contact us today to ensure you are best equipped to protect your trade secrets and business interests.
Protecting your intellectual property (IP) is essential to running a successful business. Understanding the different types of IP and how they work can ensure your ideas remain secure and utilized…>>
Chapel Hill, NC – Bagchi Law, a premier business law firm located in the United States of America, and Stoicus Legal, a boutique business law firm located in India, are…>>
Effective January 1, 2023, the California Privacy Rights Act (CPRA, Cal. Civ. Code §§ 1798.100, et seq.) strengthens and amends the California Consumer Privacy Act (CCPA). The CPRA will bring…>>
Rohit Reddy and Aravind Surendran saw a gap in the business world – so they filled it. They created Docupilot, a document generation program that quickly became an indispensable tool…>>
When you own a business, you are only as protected as your trade secrets are. That is why you should pay close attention to the Federal Trade Commission’s (FTC) recent…>>
An important decision every entrepreneur needs to make during the early stages of their startup is choosing when to engage with an attorney. Attorney’s Neil Bagchi and Glen Caplan join host Robbie Allen during the sixth episode of the For Starters podcast to help answer that question.>>
Intellectual Property – A Roundtable Discussion
USA and India Law Firms Join Forces in Cross-Border Business Collaboration
What does the new California Privacy Rights Act mean for your business?
Let's challenge the default together