Changing rules may now complicate how you can protect your company’s interests

As a business owner, you understand there are many different things that can affect your company’s profitability and bottom line. One general concern is the worry that former employees may misuse private information about your company in a new job. One of the tools to protect against that fear – noncompete agreements – is no longer available.

On April 23^rd, the Federal Trade Commission (FTC) issued an announcement of their final rule on noncompete agreements – banning them. This ban will impact any current non-compete agreement once it goes fully into effect in September. This rule from the FTC puts your business in a difficult spot and increases your risk, but there are still some opportunities.

What you can do to protect your company if you can’t use a noncompete

A noncompete is not the only way to protect what you see as your proprietary information from use by former employees. There are many tools to consider, including:

• Non-disclosure agreements (NDAs): Having your employees sign an NDA regarding their activities and knowledge of your business can restrict their ability to use any information they possess. It would still allow them to act with the knowledge they have; however, there are definite restrictions in place that limit the damage.
• Trade secret protections: As a part of intellectual property law, trade secrets are a valuable part of your firm’s IP portfolio. These can include client lists or manufacturing practices or sales strategies, anything that helps give your company an edge. You can file suit against any former employee utilizing your trade secrets without your permission.

The way forward for protecting your company’s intellectual property is not closed in any way.

This is a new challenge for your company.

The fact of the matter is that losing noncompetes as a tool is a blow to your IP protection strategy. However, as a business owner, you’ve overcome countless challenges to find your place in the market. The new rule is just one more for you to work with, and it will be a lot easier with the right help.