EXPERT INSIGHT 52 WWW.LAWYER-MONTHLY.COM | APR 2022 Enforcing Non-Compete Clauses in the Post-COVID Era Among the many areas of business that were upended by the COVID-19 pandemic, the corporate world has seen new strain put on once commonplace non-compete clauses. In what ways are these precautionary measures still viable in a world of remote work? Ruofei Xiang, senior associate at Mazzola Lindstrom LLP, offers her thoughts. he COVID-19 pandemic has seen a historic surge in remote working across the globe. What implications does this have for trade secrets and other sensitive corporate information? Since 2020, many businesses have adapted to a full or partial remote workforce or have now implemented new policies that allow flexibility for working outside of a physical office location. The move from secure offices to remote locations, such as employees’ homes puts a company’s trade secrets and confidential information at a heightened risk of unauthorised use and disclosure. This includes unauthorised copies (whether digital or paper) of sensitive information being made, inadequate precautions to safeguard confidentiality, and less control and visibility for the company over the use of such information particularly with external parties. These risks are amplified when employees use personal devices to access corporate information. While these risks are not new or unique to remote working arrangements, the pandemic has made it more difficult for companies to properly manage risk and control how employees handle confidential information on a more widespread scale. How can the use of non-compete clauses theoretically mitigate these new risks? A non-compete clause, as a preventative measure, restricts an employee from joining or starting a business in competition with their former employer for a set period of time, thereby curtailing the employee’s ability to potentially disclose or use confidential information upon termination against the former employer. It is meant to have a deterrent effect and, if well-drafted and appropriately tailored, can be a useful tool for companies to minimise leakage of valuable intellectual property and confidential information. However, with remote working becoming so common after the pandemic, non-compete clauses have really been put to the test. For example, non-compete clauses typically contain geographic limitations, which may be rendered useless now when an employee can potentially work for competitors anywhere in the country from their living room. Similarly, choice of venue and choice of law provisions may be challenged for an employee who relocated out of state during the pandemic and is now working remotely away from their regular office location With remote working becoming so common after the pandemic, noncompete clauses have really been put to the test. T
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