The Federal Trade Commission’s (FTC) ban on essentially all non-compete agreements has caused a stir in the legal world. While the new rule isn’t set to go into practice until later this year, several questions—and lawsuits—have surfaced.
Finnegan partner, Rob McCauley, spoke with Law360 and argued that the FTC puts too much stock in the ability of companies to sue for the misuse of their trade secrets, including in California, where non-competes have long been rendered unenforceable.
"I think they have it backwards. I think the proliferation of trade secrets litigation is really an indicator that misappropriation is a problem. And it's a significant problem," Rob said.
He added that he had had companies ask what they can do after employees leave for their rivals.
"The answer is generally not much or nothing, until we can prove that they've actually misappropriated something, after they've already launched a competing product and after the damage has been done," he said.
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