Recent data confirms that trade secret litigation is at an all‑time high, reflecting a fundamental shift in how companies protect proprietary information. As panelists during the recent Lex Machina webinar “Trends in Trade Secret Litigation: Key Insights from 2026 Lex Machina Report,” we discussed the drivers behind this surge and what companies should expect going forward.
On September 4 and 5, 2025, the Federal Trade Commission (FTC) took a number of steps which shed light on the direction the Trump Administration intends to go with respect to the executive branch’s enforcement actions against noncompetes.
While the FTC’s formal rule providing a blanket ban on noncompetes was struck down by a Texas-based court in August of 2024, rendering the ban ineffectual nationwide, the Biden-led FTC filed notices of appeal of the federal court decisions preventing the rule from taking effect.
Our team attended the recent AIPLA Trade Secret Summit, one of the nation’s premier conferences on trade secret law. Critical issues surrounding the protection of confidential business information took center stage and we were reminded just how important it is for companies to stay ahead of the curve to safeguard against unfair competition and trade secret theft.
The Florida Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act marks a significant shift in the state’s approach to noncompete agreements, reinforcing employer protections and reshaping restrictive covenants. This legislation, set to take effect on July 1, 2025, establishes a presumption that covered noncompete agreements and garden leave provisions are enforceable, making Florida one of the most employer-friendly states in the country.
For a deeper analysis of the CHOICE Act and its implications, read our full client alert on this legislation here.
Our team attended the recent AIPLA Trade Secret Summit, one of the nation’s premier conferences on trade secret law. Critical issues surrounding the protection of confidential business information took center stage and we were reminded just how important it is for companies to stay ahead of the curve to safeguard against unfair competition and trade secret theft.
Several topics were key takeaways for us. We last wrote on the nuances of joint representation of an onboarding employee and the hiring company. Another key topic that should be a key consideration for companies protecting trade secrets is the theft of company information and forensics.
At the recent AIPLA Trade Secret Summit, one of the nation’s premier conferences on trade secret law, critical issues surrounding the protection of confidential business information took center stage. The discussions reinforced the importance of safeguarding trade secrets and proprietary data against theft, liability, and employee mismanagement—particularly during key employment transitions such as hiring, active employment, and separation. These considerations are essential for companies striving to maintain their competitive edge while navigating complex legal and ethical challenges.
Hearing firsthand how companies handle these issues reinforced just how vital it is to stay proactive and ahead of the curve. Our team has put together a series of key take aways from the event that may help companies to guard against unfair competition and trade secret theft. Our first topic for consideration is joint representation.
Representing an onboarding employee and the company concerning the hiring of the individual can be a tricky proposition. There are good reasons for engaging in a joint representation with proper warnings and there are definite pitfalls.
One of those pitfalls is the appearance that the new employee and the new employer are joined at the hip relating to the conduct of the employee exiting a former employer (especially if the former employer is a direct competitor). When this situation occurs, the first step is to review the representation from an ethical standpoint under existing Ethics and Professionalism rules.
It is considered ethical to simultaneously represent multiple clients whose interests may not ultimately be aligned if the law does not prohibit the representation and if no client asserts a claim against any other client involved in the proceeding.
A key case to review before undertaking any dual representation is Upjohn v U.S, 449 U.S. 383 ( 1981).
In the case of Charles Schwab & Co., Inc. v. Roberto Ivan Ortega (Case No. 4:24−cv−04962), the United States District Court for the Southern District of Texas issued a Stipulated Preliminary Injunction Order on February 12, 2025.
Charles Schwab alleges that Roberto Ivan Ortega misappropriated its trade secrets and client information to solicit the business of former customers after joining a competitor. After Ortega refused Schwab’s requests to return its information, Schwab filed suit and moved for a preliminary injunction preventing the use or disclosure of its information.
Faced with the reality that a court would likely enter an injunction, Ortega’s counsel agreed to an injunction that prohibited Ortega from using, disclosing, or disseminating Schwab confidential information or soliciting Schwab customers. Ortega is also required to give Schwab access to his computing devices for Schwab to conduct discovery to uncover the scope of the misappropriation.
Courts continue to stress the need to maintain the status quo in cases involving the theft of information. Employers must take the necessary steps to prevent the theft of their information and in the cases where their information has been taken, prevent the use or disclosure of that information by filing a lawsuit and seeking an injunction.
A Massachusetts federal jury awarded $452 million against a South Korean company after concluding it had stolen secrets related to a wearable insulin patch. Nuclear verdicts are determined as ones that exceed $10 million have grown over recent years.
While the recent nuclear verdicts have mainly been in personal injury situations, this highlights risks associated with theft of trade secret information. This also highlights the need to perform internal audits on protection of sensitive information. A key to protecting valuable information is taking proactive steps to restrict access to certain proprietary information, including designs of products not readily available in the public setting.
In a recent ruling, The Louisiana Court of Appeal, First Circuit recently ruled that an employee non-solicit/no-poaching agreement is not subject to the Louisiana non-compete statute but, nevertheless, to be valid, must have a temporal limitation that is reasonable in scope to be enforceable. Because the agreement at issue was open-ended with no temporal limitation, the court ruled it was void and unenforceable.
Employers should review and, if necessary, revise their employee non-solicitation provisions to make sure they comply with the finding in this case.
On August 20, 2024, Judge Ada Brown of the US District Court for the Northern District of Texas set aside the Federal Trade Commission’s rule that effectively prohibited the use of non-compete agreements. Interpreting the Administrative Procedure Act, which provides for judicial review of the actions of federal agencies like the FTC, the court found that the FTC’s non-compete ban was unlawful.
