If you were dating someone, and they told you that you could never have another romantic relationship after breaking up with them, you would either say “pffft!” or file for a restraining order. Why do employees tolerate such behavior from employers and former business partners, then? Non-compete clauses are a common feature of employment contracts in some industries. As of 2021, approximately one in five workers has signed a non-compete agreement with their current employer. At their worst, non-compete agreements harm the economy by limiting workers’ ability to seek employment and companies’ ability to recruit new employees. On the other hand, companies have the right to protect their trade secrets. If you are involved in a dispute about the use of privileged information by a former partner or employee of a company, contact a San Diego intellectual property business lawyer.
Executive Order Protects Workers from Overreach by Non-Compete Clauses
An executive order issued by President Biden in July 2021 targeted overreach by non-compete clauses in employment contracts. The ostensible purpose of non-compete clauses is to prevent employees from taking the business secrets and innovative business practices they learned in the scope of their work and using it to open a new business that competes directly with their former employer. Despite this, many businesses require employees who do not have specialized insider knowledge to sign non-compete agreements that limit their ability to seek employment in their geographic area after their employment ends. In fact, over 20% of employees who do not have bachelor’s degrees are subject to non-compete agreements. The executive order authorizes, and even encourages, the Federal Trade Commission to “address agreements that may unduly limit workers’ ability to change jobs.” Meanwhile, California courts have consistently ruled that most workers have the right to “job hop,” and that this right is an essential component of fair market competition.
How California Law Keeps Your Trade Secrets Safe
If you are trying to protect your trade secrets, California is a good place to do it. With or without non-compete agreements, the Uniform Trade Secrets Act, which is part of the California Civil Code, acknowledges that trade secrets are a kind of intellectual property, and businesses have the right to protect their intellectual property. Whether client lists count as trade secrets depends on the circumstances. President Biden’s executive order implies that, the more specific the agreement is about which information the former employee or partner may not share, the better, and it is sufficient to specify that a party to the agreement may not share client lists. Meanwhile, California courts have ruled that “general business know-how” is not a trade secret, but rather expertise that the employee has gained in the course of their work for the employer.
Contact Foldenauer Law Group About Protecting Trade Secrets
An intellectual property lawyer can help you enforce your trade secrets or fight for your right to fairly compete in the marketplace. Contact Foldenauer Law Group, APLC in San Diego, California to discuss your case.