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Protecting your business without noncompetes

On Behalf of | Jul 10, 2024 | Firm News

The Federal Trade Commission recently (and retroactively) banned the vast majority of noncompete agreements – and the inevitable lawsuits have begun. While one judge has already ruled that the FTC lacks the authority to impose a ban, there’s still a lot of uncertainty about what will actually happen come September. 

What’s the smart business owner to do in a situation like this? Plan ahead. You would be wise to operate as if noncompetes are a thing of the past and be prepared to protect your company’s future without them. Here are some possibilities:

Step up your intellectual property protection

Your company’s intellectual property may be its most valuable asset – so act like it. Use detailed contracts with your employees and contractors that clearly outline ownership of any work that is produced during their tenure. 

Secure copyrights for all the original content you have, including software, designs and all written material – and register your trademarks to protect your brand.

Use confidentiality agreements

Non-disclosure or “confidentiality” agreements are still very much in use, and you need to use them to protect your sensitive information, whether that includes proprietary systems, special recipes or client lists and information. 

Make sure that your employee handbooks stress your company’s confidentiality policies and have employees acknowledge – in writing – any updates to policies. 

Be quick to act when agreements are broken 

Do not hesitate to seek legal guidance and move to litigation if a former employee or partner violates their agreements with your company. You do not want a reputation for being a “pushover” when it comes to your contracts. 

When a company gains a reputation for being aggressively self-protective, that can deter people from taking chances even more than the actual contracts they’ve signed.