Joseph Reisman Quoted in Media on Potential Impact of FTC Noncompete Rule

In the Chemical Processing article “Non-Compete-Ban Best Practices For The Chemical Industry,” partner Joseph Reisman commented on the recently promulgated Federal Trade Commission (FTC) final rule banning noncompete agreements and, more specifically, on ways in which companies in the chemical processing industry can prepare to adhere to the new rule.

In light of the FTC’s final Noncompete Rule, Reisman said companies could still take effective actions to protect their trade secrets, such as manufacturing process details or customers and supplier lists. Such trade secrets should be protected through means other than noncompete restrictions. He explained that employers who currently use noncompete clauses to protect trade secrets “should review their existing employment agreements and consider adding provisions (or entering into new agreements with employees).” As Reisman further explained, employers should take steps to “specifically define certain classes of trade secrets and to explicitly restrict employees’ ability to disclose such trade secrets to future employers and use such trade secrets for the benefit of a future employer."

Reisman also pointed out that the FTC saw no inconsistency between its Noncompete Rule and robust trade secret protection. He noted that the FTC, in implementing the rule, had stated that “the technology industry is highly dependent on protecting trade secrets and that it has thrived in California despite the inability of employers to enforce non-competes, suggesting that employers have less restrictive alternatives for protecting trade secrets.”

Read the full article here.