Noncompete Ban Has Companies Eying Trade Secrets, Patents (1)

The US Federal Trade Commission’s new prohibition against employer noncompete agreements could trigger a surge in trade secret litigation and patent filings, as companies try to protect their intellectual property against pilferage by departing employees.

The FTC’s final rule promises to boost competition and innovation while helping workers escape “often exploitative” labor practices, the agency declared on April 23. But the policy, set to take effect 120 days after publication in the Federal Register, could also increase poaching among competitors, warned Joseph Lanser, a partner at Seyfarth Shaw LLP.

“It will impact trade secrets substantially,” said ...