Significant developments are likely in 2025 in trade secret law, building on major cases and developments in 2024. We highlight four areas to watch: the extraterritorial reach of the Defend Trade Secrets Act, artificial intelligence, large damages awards and the impacts of a potential noncompete ban.
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Without a doubt, 2024 was a roller coaster of a year for employers in the area of noncompete law, from an FTC attempted nationwide ban on most noncompete agreements, to continued state law action seeking to narrow the use of noncompete provisions, to a growing number of court decisions revealing deep frustration by judges asked to enforce overbroad post-employment restrictions. Employers looking to protect confidential information and customer goodwill through the use of noncompetition or nonsolicitation provisions should stay abreast of state law developments and review existing agreements to ensure they are narrowly tailored to address judicially recognized protectable interests.
To view the full alert, visit the Faegre Drinker website.
On August 20, 2024, the U.S. District Court for the Northern District of Texas issued a memorandum opinion and order holding that the Federal Trade Commission rule banning post-employment noncompetes is “unlawful” and therefore must be “set aside.” This alert covers what employers need to know.
For the full alert, visit the Faegre Drinker website.
On August 15, another federal court weighed in on the question of whether the FTC exceeded its authority in issuing its rule banning post-employment noncompetes, scheduled to go into effect on September 4, 2024. In Properties of the Villages, Inc. v. Federal Trade Commission, Judge Timothy Corrigan (appointed by Pres. George W. Bush) of the Middle District of Florida enjoined the FTC from implementing or enforcing its noncompete ban against the plaintiff. Judge Corrigan declined to issue a more general, nationwide injunction.
For the full alert, visit the Faegre Drinker website.
While the FTC’s noncompete ban is still scheduled to go into effect on September 4, 2024, there are three ongoing legal challenges to it; and there are pending motions in all three cases that could enjoin it either nationwide or on some limited basis before then. In the meantime, employers may wonder what to do. We outline several options.
To view the full alert, visit the Faegre Drinker website.
On July 17, 2024, Gov. Josh Shapiro signed the Fair Contracting for Health Care Practitioners Act into Pennsylvania law. The Act prohibits the enforcement of certain noncompete covenants entered into after January 1, 2025, by health care practitioners and their employers, subject to limited, but important, exceptions. Therefore, Pennsylvania health care employers should review their employment agreements and revise them to ensure compliance.
To view the full alert, visit the Faegre Drinker website.