In Seyfarth’s first installment in its 2020 Trade Secrets Webinar Series, Seyfarth attorneys Robert Milligan, Jesse Coleman, and Joshua Salinas reviewed the noteworthy legislation, cases, and other legal developments from across the nation over the last year in the area of trade secrets and data theft, non-competes and other restrictive covenants, and computer fraud—plus, predictions for what to watch for in 2020.

As a conclusion to this webinar, we compiled a summary of takeaways:

  • While they appear on their surface to be typically straightforward affairs, trade secret and non-compete lawsuits can assume an infinite number of forms and fact patterns. It is only by keeping up with the newest laws and court pronouncements that litigants can hope to prevail in this ever-changing landscape.
  • Legislation such as anti-SLAPP laws can have a dramatic impact on a litigant’s ability to bring or defend a claim. While at least one of these laws now expressly exempts most trade secret and non-compete lawsuits from its scope, there remains a backlog of cases filed before the new regime where the anti-SLAPP law stands as the primary hurdle before a case can even proceed to full discovery. It is important to understand what anti-SLAPP law applies in your jurisdiction and what jurisdictions your courts look to for interpretation of those laws.
  • The FTC is exploring whether it has the authority to ban or limit the use of non-competes in the employment setting. It recently held a workshop where academics and regulators addressed the issue. At the workshop, legal scholars, economists, and policy experts reviewed the current state of the law and economic literature on non-compete clauses in contracts between employers and employees. Academic panels evaluated the effects of non-compete clauses on labor market participants and their efficiency rationales. The panels also will considered the potential harms to workers that may addressed through the FTC’s rulemaking, law enforcement, or advocacy authority. The FTC has invited public comment and the current deadline is March 11, 2020. We expect the FTC to continue to attempt to regulate non-competes in the employment context.

Employers should review their restrictive covenant agreements and consider whether they need to be amended for employees in jurisdictions with new restrictive covenant laws, especially new laws that now require income thresholds for the use of such agreements.