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Littleton Colorado Business Law Blog

FTC considers rule limiting use of noncompete agreements

The U.S. Federal Trade Commission (FTC) said in early January it is weighing a rule that would curtail companies from forcing employees to sign noncompete clauses that prevent them from working for competitors.

The announcement came after 19 state attorneys general wrote a letter last summer urging the FTC to limit or ban the agreements, which they say prevents workers from finding a better job or starting their own businesses.

Nondisclosure agreements aren't the only way to guard IP

Nondisclosure agreements (NDAs) have been under pressure in recent years in Colorado and across the country. Although some legal and policy reforms have weakened them in limited ways, the NDA is alive and well.

But NDAs are not the only way to keep secrets about a company’s intellectual property (IP). Whether a company is looking for ways to strengthen its NDAs or limit how much they rely on these contracts, it can be helpful to look beyond the traditional NDA.

Court says act secretive to protect trade secrets

A recent court decision was a useful reminder of a less-than-obvious but possibly important reason for your business to take proactive, early and consistent steps to protect your business’s trade secrets.

Obviously, if you don’t lock your secrets up, they’re easier to steal. But the court also found that a business’s “supposedly secret information” wasn’t secret because the business itself didn’t go through the motions to behave as if it was secret. If you don’t protect your secrets, the court signaled, don’t expect a court to do it for you.

How can a nondisclosure agreement help your business?

When you have valuable business secrets, you want to do anything to protect them. You may have a vendor or contractor who needs your secrets to fulfill a contract. Or you might have a new business plan that you don’t want your employees to take to another company. In these cases, you can prevent others from stealing your business secrets with a nondisclosure agreement or NDA.

A nondisclosure agreement is a legal contract that prevents those with knowledge of your business secrets from sharing them. Here are a few ways an NDA can protect your business:

Trade secrets in the tech industry: What to expect

Innovation and the tech industry are intimately linked. Big tech companies spend billions of dollars every year trying to stay ahead of the competition, employing thousands of people to work on cutting-edge projects meant to give their product a leg up.

With this push for constant innovation comes a real risk: the theft of trade secrets. It’s a problem the tech industry will have to brace for, with a recent high-profile case offering a clear example.

Want a new job but already signed a noncompete agreement?

The purpose of a noncompete agreement is to prevent you from working for your company’s competitors. Your employer may be concerned that you will share information that could harm the company’s prosperity.

In Colorado, there are only four circumstances in which an employer can require an employee to sign a noncompete agreement.

State's new noncompete law may help you keep your doctor

Doctors are commonly asked by their employers to sign noncompetition agreements when they’re hired to a new position. Few patients are even aware of this possibility and what it could potentially mean to them. Nonetheless, some patients have been disturbed to realize how such agreements can directly affect them.

Colorado recently enacted a new statute affecting physicians who treat rare disorders and changing the contracts drawn up by companies that employ these medical professionals. The new law limits the power employers wield over these employees when they depart the firm and continue their practice elsewhere.

Pet doctors fight back against noncompete agreement

A pair of veterinarians have taken on one of the world’s largest veterinary care conglomerates, fighting a noncompete clause that they suggest unfair business practices.

The lawsuit highlights the rapid consolidation of the pet healthcare industry, as well as growing resistance to covenants to not compete. While you may not be a veterinarian or pet owner, you’re likely to eventually face the prospect of signing a covenant to not compete.

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