FTC Faces Calls for IP Carveouts in Noncompete Ban Rulemaking

In the Media
1 min read

In Bloomberg Law, White & Case partner Adam Acosta is quoted on the potential impact of the US Federal Trade Commission's proposal to ban non-compete agreements, emphasizing that "the intellectual property and trade secrets implications are likely to be the greatest concern to most businesses."

The article outlines that the broad proposal would make illegal almost all agreements that prevent an employee from working for an employer's competitor after they leave. The FTC's notice includes only one exemption to the ban, for the founders and significant shareholders of acquired companies, rather than major carve-outs on the ban that experts believe are necessary to prevent employees from taking proprietary information with them to competitors.

As a result, the article states the proposed ban would likely upend most companies' approach to protecting their proprietary information. Without non-compete and non-disclosure agreements, or major carve-outs on the sweeping ban, businesses across the country would be forced to utilize other mechanisms to protect their information, such as expensive and difficult-to-prove trade secrets litigation.

See the full Bloomberg Law article here.

White & Case LLP previously issued a client alert discussing Four Takeaways From The FTC's Unprecedented Crackdown On Noncompete Agreements.

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