Non-compete clause as a protection remedy of employer`s trade secrets: pro & contra
The article considers the non-compete clause as a protecting tool of employer's trade secret. Looking for optimal approach to the legal regulation of non-compete clause with employee, it is highlighted the latest trends of foreign experience (mainly the USA and Great Britain). The focus of atte...
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| Format: | Article |
| Language: | English |
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Intellectual Property Scientific Research Institute of the National Academy of Legal Sciences of Ukraine
2025-03-01
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| Series: | Теорія і практика інтелектуальної власності |
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| Online Access: | https://drive.google.com/file/d/1PztRR-WG60v7mDpWq9TmYwM_sydJhytJ/view |
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| _version_ | 1849324218183843840 |
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| author | Nina Bilousova |
| author_facet | Nina Bilousova |
| author_sort | Nina Bilousova |
| collection | DOAJ |
| description | The article considers the non-compete clause as a protecting tool of employer's trade secret. Looking for optimal approach to the legal regulation of non-compete clause with employee, it is highlighted the latest trends of foreign experience (mainly the USA and Great Britain). The focus of attention has become The Non-Compete Clause Rule adopted by the US Federal Trade Commission in 2024, by which non-compete clauses are recognized as acts of unfair competition and are subject to a complete ban in relations with workers, which include employees, individual entrepreneurs etc. It is argued that The Non-Compete Clause Rule has started a trend towards limiting and even banning the non-compete clause with individuals. It is proposed to pay attention to the research results of the Federal Trade Commission, which revealed the depressing effect of the non-compete clause on the entrepreneurial and labor activity of workers and the inhibiting effect on the innovative economy. Furthermore, it is considered that non-compete clauses become an obstacle to the foundation of startups by
former employees, do not give an opportunity to use their experience in mentoring startups. It is emphasized that legal regulation of the non-compete clause should take into account the interests of Ukrainian society (public interests) and maximally contribute to the activation of entrepreneurship, including innovative ones, among Ukrainians and the release of their labor
potential. It has been established that the non-compete clause is only one of the tools for protecting the employer's trade secret, there are other means that do not directly limit competition: trade secrets' protection by intellectual property rights, patent law where it is relevant, copyright for the relevant content of trade secrets, the right sui generis to non-original databases and database content; non-disclosure agreements. The stability of the workforce in the company can be ensured by improving working conditions. It is substantiated the expediency
of banning non-compete clauses in contracts with individuals, but active use by business entities of other tools to protect their trade secrets. It is argued that a non-compete clause may be used as a condition giving the right to remuneration according to the terms of the contingent transaction. |
| format | Article |
| id | doaj-art-a526c1639f214ecfb7cc1e6ca3ddd2ee |
| institution | Kabale University |
| issn | 2308-0361 2519-2744 |
| language | English |
| publishDate | 2025-03-01 |
| publisher | Intellectual Property Scientific Research Institute of the National Academy of Legal Sciences of Ukraine |
| record_format | Article |
| series | Теорія і практика інтелектуальної власності |
| spelling | doaj-art-a526c1639f214ecfb7cc1e6ca3ddd2ee2025-08-20T03:48:46ZengIntellectual Property Scientific Research Institute of the National Academy of Legal Sciences of UkraineТеорія і практика інтелектуальної власності2308-03612519-27442025-03-011647410.33731/12025.324979Non-compete clause as a protection remedy of employer`s trade secrets: pro & contraNina Bilousova0https://orcid.org/0000-0003-4134-0856Kyiv National Economical University named after Vadym HetmanThe article considers the non-compete clause as a protecting tool of employer's trade secret. Looking for optimal approach to the legal regulation of non-compete clause with employee, it is highlighted the latest trends of foreign experience (mainly the USA and Great Britain). The focus of attention has become The Non-Compete Clause Rule adopted by the US Federal Trade Commission in 2024, by which non-compete clauses are recognized as acts of unfair competition and are subject to a complete ban in relations with workers, which include employees, individual entrepreneurs etc. It is argued that The Non-Compete Clause Rule has started a trend towards limiting and even banning the non-compete clause with individuals. It is proposed to pay attention to the research results of the Federal Trade Commission, which revealed the depressing effect of the non-compete clause on the entrepreneurial and labor activity of workers and the inhibiting effect on the innovative economy. Furthermore, it is considered that non-compete clauses become an obstacle to the foundation of startups by former employees, do not give an opportunity to use their experience in mentoring startups. It is emphasized that legal regulation of the non-compete clause should take into account the interests of Ukrainian society (public interests) and maximally contribute to the activation of entrepreneurship, including innovative ones, among Ukrainians and the release of their labor potential. It has been established that the non-compete clause is only one of the tools for protecting the employer's trade secret, there are other means that do not directly limit competition: trade secrets' protection by intellectual property rights, patent law where it is relevant, copyright for the relevant content of trade secrets, the right sui generis to non-original databases and database content; non-disclosure agreements. The stability of the workforce in the company can be ensured by improving working conditions. It is substantiated the expediency of banning non-compete clauses in contracts with individuals, but active use by business entities of other tools to protect their trade secrets. It is argued that a non-compete clause may be used as a condition giving the right to remuneration according to the terms of the contingent transaction.https://drive.google.com/file/d/1PztRR-WG60v7mDpWq9TmYwM_sydJhytJ/viewtrade secret protectionnon-competition clausedelaying circumstanceintellectual property |
| spellingShingle | Nina Bilousova Non-compete clause as a protection remedy of employer`s trade secrets: pro & contra Теорія і практика інтелектуальної власності trade secret protection non-competition clause delaying circumstance intellectual property |
| title | Non-compete clause as a protection remedy of employer`s trade secrets: pro & contra |
| title_full | Non-compete clause as a protection remedy of employer`s trade secrets: pro & contra |
| title_fullStr | Non-compete clause as a protection remedy of employer`s trade secrets: pro & contra |
| title_full_unstemmed | Non-compete clause as a protection remedy of employer`s trade secrets: pro & contra |
| title_short | Non-compete clause as a protection remedy of employer`s trade secrets: pro & contra |
| title_sort | non compete clause as a protection remedy of employer s trade secrets pro contra |
| topic | trade secret protection non-competition clause delaying circumstance intellectual property |
| url | https://drive.google.com/file/d/1PztRR-WG60v7mDpWq9TmYwM_sydJhytJ/view |
| work_keys_str_mv | AT ninabilousova noncompeteclauseasaprotectionremedyofemployerstradesecretsprocontra |