During the recent Employment Law Symposium hosted by Ward and Smith, attorneys shared critical insights on pressing legal issues affecting employers today. The discussions covered significant changes in regulations concerning Immigration and Customs Enforcement (ICE), strategies for handling investigations, the implications of restrictive covenants, and compliance with diversity, equity, and inclusion (DEI) programs.
Restrictive Covenants were a key topic, with Emily Massey, a certified specialist in employment law, highlighting a notable development regarding noncompete agreements. Recently, a federal judge in Texas halted a regulation from the Federal Trade Commission (FTC) that aimed to ban most noncompete agreements. Massey noted that the previous administration had appealed this ruling, but the current administration has not yet withdrawn that appeal. “It’s puzzling why no action has been taken, but we will keep our clients updated,” she stated.
In a surprising turn, shortly after Massey’s remarks, the Trump administration dropped the appeal against the ban. Massey anticipates this will lead to reduced scrutiny of noncompete agreements from the National Labor Relations Board (NLRB), especially following the removal of the previous General Counsel who had issued multiple memoranda on the subject.
Current trends indicate a general movement among states toward limiting the enforceability of noncompete agreements. For example, Virginia has banned noncompete agreements for non-exempt employees eligible for overtime. Meanwhile, states like Kansas are adopting more favorable laws for non-solicitation agreements, which can provide a more balanced approach for protecting business interests.
Massey emphasized the importance of reviewing existing noncompete agreements to ensure they are narrowly tailored. “Employers should consider using non-solicitation agreements as an alternative to protect their trade secrets,” she advised.
Theft of Trade Secrets was another critical area discussed, with Gavin Parsons, an attorney specializing in litigation and intellectual property, addressing how organizations can safeguard their confidential information. He defined trade secrets broadly as any valuable information that a business actively protects from disclosure. This includes client data, manufacturing processes, and proprietary software.
Parsons underscored the importance of ensuring that employees understand their obligation to maintain confidentiality, stating, “Any employee handling potentially valuable confidential information should have an obligation to keep it confidential.” Unlike patents, trade secrets do not expire, and if proper measures are not taken, the value of such information can be lost.
The recent legal landscape has prompted employers to increase their focus on protecting trade secrets, particularly as noncompete agreements become less viable. Parsons noted, “With more employees able to leave freely, companies must take proactive steps to secure their information.” He also pointed out that advancements in technology make it easier to misappropriate sensitive data, particularly in a remote work environment.
“Protection should begin during the onboarding process,” Parsons recommended, emphasizing the need for clear policies regarding the storage and transfer of confidential information. Monitoring digital environments effectively can help identify unusual activity, which is essential during periods of employee transition.
Parsons also addressed the implications of artificial intelligence on trade secret protection. He shared an anecdote about querying AI regarding a protected formula, illustrating that generative AI currently lacks access to proprietary information unless it has been disclosed. He cautioned organizations to be wary of sharing sensitive data with outside AI programs and suggested implementing policies to prevent such disclosures.
As the legal landscape continues to shift, staying informed and connected with legal counsel is vital for businesses navigating these complexities. The insights shared at the Ward and Smith symposium provide a foundation for employers to better protect their interests in an evolving regulatory environment.
