Seyfarth Shaw LLP

The breadth of our discussions covered a spectrum of critical topics:

2024 Trade Secrets & Non-Compete Year in Review

1. Navigating the Intersection of Non-Com The breadth of our discussions encompassed a spectrum of critical topics:
2. 2024 Trade Secrets & Non-Competes Year in Review
3. Navigating the Intersection of Non-Compete Agreements and Employee Mobility
4. Employee Training Programs: Building a Culture of Confidentiality
5. Navigating Legal Minefields: Insights from Seyfarth’s 2024 Commercial Litigation Outlook
6. Deciphering the FTC’s Non-Compete Ban: Navigating the New Regulatory Terrain and Adequately Protecting Employers’ Interests
7. Data Protection and Cybersecurity: Safeguarding Trade Secrets in the Digital Age
8. Unveiling Trade Secrets Breaches: Leveraging Forensic Exams for Robust IP Protection
9. Enforcement Strategies Beyond Litigation: Leveraging Alternative Dispute Resolution
10. Trade Secrets Audits: Assessing and Strengthening Your Company’s IP Protection

What Employers Need to Know Regarding Non-Compete Changes in 2024

To conclude our impactful 2024 webinar series, we’ve carefully compiled key takeaways from each session. You can watch recordings of the sessions you missed on our blog. After viewing the webinar, please email cle@seyfarth.com for CLE credit inquiries. For CLE credit inquiries, please email cle@seyfarth.com after viewing the webinar.

2023 Trade Secrets & Non-Competes Year in Review

View the Recording – CLE credit for this recording expires on January 30, 2025.

• Seyfarth partners Michael Wexler, Kate Perrelli, and Robert Milligan meticulously examined pivotal legislation, landmark cases, and legal advancements spanning trade secrets, data theft, non-competes and restrictive covenants, and computer fraud nationally. Tailored specifically for general counsel, labor and employment counsel, IP counsel, and HR professionals, this webinar offered essential insights into trade secrets, non-competes, restrictive covenants, and computer fraud.
• Federal agencies continue to crack down on the use of non-compete covenants. The FTC has moved forward with their proposed ban on non competes with employees. We expect to see an official rule released by mid-spring of 2024. Legal challenges are expected. The NLRB General Counsel released a memo indicating enforcement actions against companies that use non-compete agreements with their non exempt workforce. At least one agency has taken action so far. We also saw federal legislation that would have banned or restricted the use of noncompetes. We expect this to be reintroduced by 2024. Lastly, federal agencies insisted on broad whistleblower protections in confidentiality agreements with impacted employees and customers.
• State legislatures continued to narrow the use of the non-competes with employees. Minnesota banned non-competes. California’s new law positions the state as a beacon on the hill for employees and California employers who are trying to shed employee non-compete covenants that may be enforceable in other jurisdictions. California’s new law positions the state as a beacon on the hill for employees and California employers attempting to shed employee non-compete covenants that may be enforceable in other jurisdictions.
• We saw an increasing hostility towards restrictive covenants by certain judicial officers in the Delaware Chancery Court, including in cases involving employment and equity agreements with out-of-state executives, with a notable differing view in a recent Delaware Supreme Court case, which reaffirmed Delaware’s deference to parties’ freedom to contract.

We continued to see large trade secret verdicts and an increasing focus on novel trade secret damage theories. We saw notable decisions addressing the recovery of damages for non-U.S. sales under the Defend Trade Secrets Act and the recovery of unjust enrichment damages when damages for actual losses are insufficient.

Navigating the Intersection of Non-Compete Agreements and Employee Mobility

View the Recording – CLE for this recording expires on February 20, 2025.

• Seyfarth partners Dan Hart, Kate Perrelli, and associate Cat Johns unraveled the intricate relationship between non-compete agreements and employee mobility, with a specialized focus on the perspectives crucial to HR professionals and In-House General Counsel.
• The post-COVID workplace poses increased risks to companies’ trade secrets and other confidential information as remote work appears to be here for good.
• The crackdown on employee non-compete agreements at the federal and state level poses additional risks to employers posed by employees moving to competitors, with the pending FTC proposed rule on non-competes, enforcement activities by the NLRB, and state legislatures continuing to ban or curtail the use of non-competes

Given the uncertainty around non-competes, companies should consider a variety of measures to protect their critical assets, including other tailored agreements, regularly updating policies and procedures, implementing training programs, reminding employees of the company’s policies and protocols, and implementing technological protections and monitoring of employee IT resources

Employee Training Programs: Building a Culture of Confidentiality

View the Recording – CLE credit for this recording expires on March 26, 2025.

• Seyfarth attorneys Justin Beyer, Joshua Salinas, and Dallin Wilson delved deeper into the intricacies of building a robust culture of confidentiality through innovative Employee Training Programs. This webinar was a pivotal discussion tailored to empower HR professionals and in-house counsel.
• Companies should regularly review their restrictive covenant agreements as the statutory landscape continues to evolve.
• We continue to see new state-specific legislation regarding the use and enforcement of restrictive covenants, such as notice requirements, income thresholds, and protections for certain professions.
• Building a culture of confidentiality requires that employers consistently educate employees as to the company’s confidential and trade secret information through the employment relationship, and should include specific steps during the onboarding and off-boarding process.

Maintaining a culture of confidentiality includes training employees on what is confidential information and how to protect that information. It also includes entering into agreements with both employees as well as customers and third-party providers to ensure that information that the company discloses continues to be treated as confidential.

Navigating Legal Minefields: Insights from Seyfarth’s 2024 Commercial Litigation Outlook

• View the Recording – CLE credit for this recording expires on April 10, 2025.
• Trade Secret attorneys Dawn Mertineit and James Yu participated in Seyfarth’s 2024 Commercial Litigation Outlook series, “Navigating Legal Minefields: Insights on Restrictive Covenants, eDiscovery, and Privacy Compliance.” Moderated by Rebecca Woods, the session featured Dawn and James discussing the evolving landscape of non-competes and trade secrets, while Jason Priebe and Matthew Christoff covered eDiscovery and privacy compliance.
• State legislatures and federal agencies continue to aim non-competes, so employers should consult with knowledgeable counsel and draft agreements that are not broader than necessary. Perhaps most notably, the FTC is on the cusp of announcing a rule regarding non-compete enforceability which is expected to ban virtually all such agreements (although we anticipate any such rule will be challenged in court almost immediately).
• Even without legislation, court decisions continue to evolve the non-compete landscape, as seen in Delaware’s trend against reforming overbroad agreements (even in the sale of a business context).

While non-competes are the main focus, even non-solicits and non-disclosure agreements may be invalidated under various statutes, federal rules, or court decisions if they are deemed too broad.

Deciphering the FTC’s Non-Compete Ban: Navigating the New Regulatory Terrain and Adequately Protecting Employers’ Interests

View the Recording – CLE Credit for this recording expires on May 2, 2025.

• Our multi-disciplinary team from the FTC Non-Compete Ban Taskforce, comprised of Michael Wexler, Robert Milligan, Kate Perrelli, Suzie Saxman, and Marc Fosse, dissected the ramifications of the new FTC rule banning most non-competes with workers and provided invaluable insights into how it impacts a variety of aspects of many businesses.
• Labor: The FTC rule is just the latest salvo in President Biden’s “whole of government” approach relating to restrictive covenants. The NLRB general counsel has been arguing that restrictive covenants applied to nonsupervisory employees were illegal for over a year. With both the NLRB and FTC cracking down on non-competes, employers may wish to take this opportunity to revisit their practices with respect to restrictive covenants.
• Trade Secrets: As the FTC Rule is the subject of pending legal challenges, it is a good time to review your restrictive covenant agreements, including non-competes, to make sure they comply with state laws. If the Rule is implemented, other restrictive agreements will be even more important in protecting business assets. If the Rule does not become effective, you have the benefit of having audited your agreements for state compliance.
• M&A: While buyers in an M&A transaction will generally be able to benefit from non-competes given by sellers, with the FTC Rule, it will be more difficult to obtain enforceable non-competes from workers/sellers who hold small shares of the target and are not involved in negotiating the terms of the sale. M&A buyers will need to develop alternatives to a “one size fits all” approach to non-competes.
• Employee Benefits: This is a good time to analyze the potential scope of employees who would have non-grandfathered agreements. For example, analyze now which employees in a nonqualified deferred compensation plan with a post-termination non-compete and who are part of a top hat group would also be treated as senior executives.

Compliance: September 4, 2024, is the current scheduled effective date of the FTC Rule. Prudent employers will closely monitor whether the FTC rule is vacated or if the FTC is prohibited from enforcing it. Employers should be prepared at the very least to send required notices in the event that there is no injunction prior to the effective date. Employers should compile the list of affected current and former employees with contact information to determine if any of them qualify as “senior executives”. They should also evaluate if there are “senior managers” who The FTC Rule includes a model notice that can be sent by email, text message or paper notice. The notices have to be sent before the rule’s effective date. But for right now employers should carefully monitor the federal action brought in the Northern District of Texas seeking to vacate the Rule and enjoin the FTC from enforcing it.

Unveiling Trade Secrets Breaches: Leveraging Forensic Examinations for Robust IP Protection

View the Recording – CLE Credit for this recording expires on September 30, 2025.

• Seyfarth’s Intellectual Property partner, Lauren Leipold, along with Trade Secret attorneys Eddy Salcedo and James Yu, shared essential strategies for enhancing IP protection in today’s complex landscape. As corporate espionage and data breaches become increasingly prevalent, this webinar provided valuable insights on effective methods for safeguarding your company’s intellectual assets.
• Look for opportunities to secure rights in trademarks, copyrights, and patents by filing for federal registrations
• The same subject matter could be subject to patent or trade secret protection, depending on your business needs
• Consider whether additional contractual language is required to secure ownership rights in IP, even after registration
• Think critically about your IP portfolio as a whole when crafting employment agreements and corporate policy
• Determine what, if any, agreements you have in place, such as Confidentiality Agreements, Restrictive Covenants, Assignment of Inventions, and Return of Materials, and ensure they are uniform and up to date.
• Ensure that your agreements, and their terms, comport to the applicable State Laws to ensure enforceability.
• Review your IP policies, practices, and procedures to make sure adequate protections are in place to establish you are engaged in reasonable efforts to safeguard your IP and trade secrets.
• Review and update, as needed, Employee Handbooks, Information Security Policies, BYOD, and Social Media Policies so that employees are aware and do not “inadvertently” disclose sensitive materials.
• Implement Generative AI Policies and procedures to further protect against disclosure of sensitive information.
• Ensure IT, Legal, and Management of the Company are aware of all potential risks of exfiltration with respect to electronic data, so they can implement policies and procedures to mitigate risk.
• Install extra levels of security where necessary, including two-factor authorization, data encryption, and limiting the use of third-party apps to protect particularly sensitive information, particularly with a hybrid and remote workforce, of the Company allowing the use of personal devices.
• Ensure employees understand what information the Company considers confidential, as trade secret identification is critical to successfully asserting a trade secret claim.
• Develop a culture of confidentiality by regularly updating Company policies, and employment agreements, and providing regular training.
• Develop and maintain a protocol for on-boarding and off-boarding employees that ensures that confidentiality obligations are acknowledged and enforced.

Develop a consistent return of information and device policy for both in-person and remote workforce.

What Employers Need to Know Regarding Non-Compete Changes in 2024

View the Recording – CLE Credit for this recording expires on December 16, 2025.

• Seyfarth partners Kate Perrelli, Justin Beyer, Jesse Coleman, and attorney Joshua Salinas provided practical guidance on navigating non-compete agreements, safeguarding trade secrets, and understanding critical regulatory developments impacting employers across the United States. This session highlighted key updates from the release of our 2024-2025 Edition of Seyfarth’s 50-State Non-Compete Desktop Reference.
• The FTC’s Final Rule banning virtually all non-competes appears to be on life support.
• The USDC in the Ryan v. FTC case set aside the Rule on August 20, 2024, and the FTC has appealed to the 5th Circuit. The precedent in that Circuit does not bode well for the FTC.
• The FTC also appealed to the 11th Circuit from an unfavorable decision staying the rule for the plaintiffs only in a USDC in Florida.[.     ]The incoming Trump administration has indicated that it will replace FTC Chair Khan with
• , and most believe that the administration will abandon the FTC appeals.
• Whatever the fate of the FTC Rule, the FTC may continue to bring enforcement actions against companies it deems have violated the FTC Act by using overly broad non-competes. Businesses should use narrowly tailored non-competes for their critical employees, not all employees.
• The NLRB’s General Counsel doubled down this year on its argument that non-competes violate the National Labor Relations Act (also adding that stay-or-pay agreements caused similar violations) but had mixed success with this argument in front of administrative law judges. It is unlikely that the Trump administration will maintain this position, however, as a new GC and eventually Republican-led Board are likely to take more pro-employer positions.
• Louisiana passed a law effective Jan. 1, 2025, limiting the use of non-competes with physicians, joining an increasing number of states limiting the use of restrictive covenants in the healthcare industry generally. Early indications show we can expect more attempted state legislation like this in 2025.
• Modification to state laws slowed down somewhat in 2024, as the FTC’s proposed nationwide non-compete ban and the NLRB’s actions took center stage, but the topic will continue to be one of significant interest throughout the United States in 2025 and beyond. Several states focused their non-compete reform efforts on the healthcare industry, and many states either enacted wage thresholds for non-competes or modified them to keep pace with cost of living adjustments.

Under California law, the partial sale of a business may support a non-compete under the rule of reason.

2025 Trade Secret Webinar Series

As we step into the new year, our commitment to providing valuable insights continues with the 2025 Trade Secret Webinar Series. The 2025 Trade Secret Webinar Series will kick off our series in January with the first webinar “2024: Trade Secrets and Non-Competes – Key Trends and insights.” This webinar will provide a detailed

Story originally seen here