Trade Secrets Cases Shoving Aside Noncompetes Amid High Turnover

A recent North Carolina state court ruling that ex-employees of an HVAC company could be liable for stealing trade secrets like customer lists—but not for calling those customers in violation of a covenant—was an outcome fitting an emerging trend.

Companies that feel exploited by former employees helping a rival increasingly turn to trade secrets claims for relief, as restrictive employee covenants fall out of favor. In recent months that has combined with a spike in pandemic-spurred employee movement to fuel a rise in trade secrets cases, attorneys say.

Noncompete and non-solicitation agreements that bar employees for a period from joining ...