With noncompete agreements increasingly phased out, businesses are exploring alternative strategies to protect intellectual property, including the use of ‘garden leave’ clauses. With less use of noncompete clauses, nonsolicitation agreements may play an increasingly essential role to help private entities manage the market for employment and employment mobility. The vital concern is to keep balance in the corporate ecosystem between the competing interests of employers to protect their proprietary information with their employees’ rights to change jobs.
John Siegal, a partner at Baker & Hostetler, underscored the anticipated significance of these alternative agreements, remarking, “Nonsolicitation agreements will be that much more important, that much more of a prevalent part of how private entities regulate … or manage the market for employment and employment mobility”. More on this
The increase in measures such as ‘garden leave’, a policy that requires outgoing employees to stay away from work during their notice period while still being on the payroll, may become more commonplace. This prevents them from joining a competitor immediately and also gives the employer time to manage the transition.
A successful transition away from noncompete agreements will require finding the right balance between protecting a company’s proprietary information and resources and respecting the career advancement and mobility of its talented workforce.