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The Changing “State” of Non-Compete Laws

The days of the “company man” are seemingly over. Employees are changing jobs faster and more often, and that means their knowledge – and potential trade secrets – are leaving with them. In response, employers are using non-competes more and more often—but the tactic has unintended consequences. “Non-compete and trade-secret litigation has increased, which in turn catches the eye of state lawmakers,” says Katie Connolly, a labor and employment attorney with Nilan Johnson Lewis who advises multi-state employers on non-compete policies. States like Illinois, New York, Maryland, and Massachusetts have introduced legislation limiting the use of non-competes. “Broader use of non-competes has resulted in the introduction of legislation restricting the use of non-competes—and it seems to be increasing,” Connolly says. She notes that in addition to adding broader language to non-competes, employers have been using “blanket” non-competes for employees of all levels, including in lower-paid positions—those who have little opportunity of taking trade secrets. She advises employers to carefully tailor the language within their agreements and work with an attorney to draft specific non-competes for specialized positions.

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