Over the past few years, I’ve had countless conversations with employers about noncompetes. Some are wondering whether their agreements are still enforceable. Others are trying to navigate a patchwork of state laws or make sense of the latest legal developments. It’s not hard to see why.
The attempted nationwide ban on noncompetes by the FTC Non-Compete Rule generated headlines across the country before it was ultimately set aside by a federal court, fundamentally changing the conversation around restrictive covenants. But in many of the conversations I’m having with clients, I find myself steering them toward a different question: What are you doing to protect your business if the noncompete isn’t there?
Because when a valued executive, top salesperson, or key employee leaves, the real concern is rarely the departure itself. It’s everything that may leave with them: customer relationships, institutional knowledge, strategic plans, pricing information, business opportunities, and other confidential information that gives a company its competitive edge. That’s why I think the current focus on noncompetes, while understandable, can sometimes cause employers to overlook the bigger picture.
It’s About More Than Restricting Competition
For years, many employers viewed noncompetes as the primary tool for protecting their business. If someone left for a competitor, the agreement would help prevent immediate competitive harm. But a strong protection strategy has never been about a single document. The employers that weather executive departures most successfully are usually the ones that have done the less visible work long before a resignation ever occurs. They’ve identified what information is truly valuable, limited access where appropriate, established clear expectations, and created a culture where confidentiality is taken seriously. Those steps may not seem particularly exciting when everything is running smoothly. They become incredibly important when it isn’t.
Trade Secrets Don’t Become Trade Secrets Overnight
One thing I often tell clients is that courts tend to look at how a company treated its information before a dispute arose. Did the company consistently protect the information? Did employees understand their obligations? Was access limited to the people who actually needed it? In other words, was the information genuinely treated as confidential, or is the company only calling it confidential now that someone has left?
Recent headlines in the artificial intelligence sector offer a useful reminder. In a highly publicized dispute, xAI alleged that a departing employee took highly confidential information relating to its AI technology before joining a competitor. Whatever the ultimate outcome of that litigation, the allegations underscore a reality many employers face: when key employees leave, the most valuable assets at risk are often information, relationships, and know-how, not physical property. The strongest trade secret cases are often built on years of good business practices, not just strong legal arguments.
Don’t Overlook Your Confidentiality Agreements
If there is one area employers should revisit regularly, it’s their confidentiality agreements. Many organizations are still relying on forms that were drafted for a workplace that looks very different from today’s environment. Employees work remotely, access information through multiple devices, collaborate through cloud-based platforms, and carry far more data in their pockets than most companies could have imagined a decade ago. The agreements should reflect those realities. More importantly, they should be understandable. Employees are far more likely to respect obligations they actually understand than provisions buried in dense legal language that no one reads after signing. I’ve found that many employers spend more time debating whether they need a noncompete than ensuring their confidentiality provisions are current, comprehensive, and tailored to the way information actually moves within their organization. That may be backwards.
Executive Agreements Deserve Special Attention
Not every employee creates the same level of risk. A senior executive often has access to information that touches nearly every aspect of the business, from long-term strategy and financial performance to acquisition plans and key customer relationships. For that reason, executive agreements deserve thoughtful attention. Rather than relying on a one-size-fits-all approach, employers should consider whether the protections in place actually reflect the executive’s role and the legitimate business interests the company is trying to protect. The goal isn’t to create the most restrictive agreement possible. The goal is to create an agreement that will make sense when it matters most.
The Last Day Matters More Than Most Employers Think
I’ve often found that some of the most avoidable problems occur during an employee’s final days with an organization. A well-managed departure does not have to be adversarial. In fact, it usually shouldn’t be. A thoughtful offboarding conversation can provide an opportunity to remind the employee of ongoing obligations, confirm the return of company information, address access to systems and devices, and ensure everyone leaves with a clear understanding of expectations moving forward. Recent trade secret cases continue to highlight the importance of those seemingly routine steps. Courts evaluating trade secret claims frequently examine whether companies conducted meaningful offboarding, revoked access rights, recovered confidential information, and reinforced ongoing confidentiality obligations. Employers that treat offboarding as an afterthought often face a much steeper climb when trying to protect information after an employee has left. A little attention during that transition can prevent a great deal of uncertainty later.
A Better Question
As employers continue to follow developments involving noncompetes, I think it’s worth stepping back and asking a broader question. If a key employee resigned tomorrow, would your organization be protected? The answer should not depend entirely on a noncompete agreement. The employers that tend to navigate these transitions most successfully are the ones that have invested in strong confidentiality protections, thoughtful executive agreements, sound trade secret practices, and clear processes that support all of those efforts. The noncompete debate has dominated employment-law headlines for the better part of two years. But when the next trade secret dispute, executive departure, or employee-raiding case makes the news, the outcome likely won’t turn on whether a company had the most aggressive noncompete agreement in the industry. It will turn on something less dramatic: Whether the company consistently protected the information it claimed was worth protecting.
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