President Joe Biden is expected to sign an executive order which, among other things, would ban or limit worker non-compete agreements that companies rely to help protect their legitimate business interests. The ban could create a crisis for many corporate executives.
‘Huge Impact’
Leiza Dolghih is a partner and the co-chair of the Lewis Brisbois law firm’s trade secrets and non-compete disputes practice. She said the proposed ban, “if it happens, will have a huge impact on the ability of small and medium-size businesses to protect their trade secrets.
“For those businesses whose success is built on trade secrets, such as customer lists, secret recipes, or other proprietary methods and processes, a ban on non-compete agreements will significantly impact their ability to protect that information from being used by former employees and competitors,” she said
Current Practice
According to Dolghih, “Non-compete agreements are especially useful to ensure that employees who have had access to a company’s confidential information and specialized training cannot just set up a shop across the street from their employer and use the information they learned on the job to compete with that employer.
“Right now, a former employer with an enforceable non-compete agreement, may enforce such an agreement in court without having to prove that a former employee took any confidential information upon their departure or is actually using that information in their new job,” she observed.
Protecting Business Interests
Dolghih noted that, “Many companies rely on non-compete agreement to protect their legitimate business interests. This includes protecting the confidentiality of trade secrets, preserving customers’ goodwill, and protecting the investment in employee training and development.
“However, if non-compete agreements are banned, companies will have to rely on complex trade secrets misappropriation laws for protection of their confidential information. Lawsuits under the trade secrets misappropriation statutes can get very expensive, and while the likes of Apple, Amazon and other large companies can bear the cost of such litigation, many smaller companies simply will not be able to afford it,” she said.
Shifting Burden Of Proof
Dolghih predicted, “…employers will have to prove that an employee is using or is going to use their trade secrets at a new job, which is difficult to prove. As you can imagine, such evidence is often not available to former employers who have limited information about what employee is doing at a new job, other than that they are working for a competitor.”
"impact" - Google News
July 09, 2021 at 08:04PM
https://ift.tt/3hWJejp
How Biden’s Proposed Ban On Non-Compete Agreements Would Impact Companies - Forbes
"impact" - Google News
https://ift.tt/2RIFll8
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "How Biden’s Proposed Ban On Non-Compete Agreements Would Impact Companies - Forbes"
Post a Comment