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Kevin Ku, Unsplash

As organizations increasingly incorporate AI into recruiting, workforce planning, employee monitoring, and performance management, the legal risks extend beyond privacy and employment law. You may find thought leadership from our colleagues regarding the EU AI Act useful. In their recent Westlaw Today article, Yana Komsitsky, Paul Whinder, and Georgia Hill Smith examine what types of workplace AI tools are likely to be classified as high-risk under the EU AI Act and the governance structures organizations should be building to prepare for compliance, alongside existing laws governing automated processing, including GDPR and others coming online across the US and elsewhere. For businesses seeking to leverage AI while protecting proprietary information, maintaining workforce trust, and managing compliance obligations across jurisdictions, the article offers a timely roadmap. This article is useful insight for developers into the deployer assessment process.

Why This Matters

  • AI tools are becoming embedded in workforce management processes that can directly affect employee careers and business operations.
  • Governance failures can create legal, compliance, and employee relations risks.
  • Organizations should understand how AI tools are being deployed across the enterprise before expanding their use.

The full article is available here.

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Upon President Trump’s reelection and his immediate termination of not only former General Counsel Jennifer Abruzzo of the National Labor Relations Board (“NLRB”) but also Board Member Gywnne Wilcox, it was apparent that changes would soon be coming to the agency. One of the most significant early shifts occurred on February 14, 2025, when then-acting General Counsel of the National Labor Relations Board William Cowen rescinded several memoranda Abruzzo had previously issued.

One of these, Memorandum GC 23-08, was issued on May 30, 2023, and stated that “[e]xcept in limited circumstances,” the “proffer, maintenance, and enforcement” of non-compete agreements violates the National Labor Relations Act (the “Act”). See NLRB, Office of the General Counsel, Non-Compete Agreements that Violate the National Labor Relations Act, Memorandum GC 23-08, at p. 1 (May 30, 2023) (rescinded Feb. 24, 2025).

Another rescinded memorandum, Memorandum GC 25-01, was issued on October 7, 2024, and built on the first by making recommendations for “remedying the harmful effects of” not only noncompete agreements, but also “stay-or-pay” provisions such as training repayment agreement provisions (also known as “TRAPs”), educational repayment contracts, quit fees, damages clauses, and even sign-on bonuses tied to specific stay periods. See NLRB, Office of the General Counsel, Remedying the Harmful Effects of Non-Compete and “Stay-or-Pay” Provisions that Violate the National Labor Relations Act, Memorandum GC 25-01 (Oct. 7, 2024) (rescinded Feb. 14, 2025).

Continue Reading Cementing Directional Shift: NLRB Advice Memorandum Confirms Lawfulness of Non-Competes and Raises Questions About Separation Agreements
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Sebastian Schuster, Unsplash

As part of Seyfarth’s 2026 Trade Secrets Webinar Series, our panel presented Digital Exfiltration & Departing Employees: Protecting Trade Secrets in a Modern Risk Environment, examining the growing risks organizations face as employee mobility increases and technology creates new avenues for information transfer.

Jay Carle, Marcus Mintz, and Joe Greenfield of Maryman led a practical discussion for in-house counsel, HR professionals, executives, and business leaders focused on identifying, preventing, and responding to trade secret theft and data exfiltration.

View the Recording – CLE credit for this recording expires on June 17, 2027. Please refer to the program description for jurisdiction-specific details and deadlines.

Key Takeaways

Most Trade Secret Risks Begin with Departing Employees

Departing employees remain one of the leading sources of trade secret misappropriation. Organizations often have only a narrow window to identify suspicious activity before valuable confidential information leaves the company. The consequences can include lost competitive advantage, costly litigation, and reputational damage.

Data Can Leave the Organization in More Ways Than Ever

Today’s exfiltration methods extend far beyond USB drives. Employees can transfer information through personal devices, cloud storage platforms, personal email accounts, remote-access software, printed documents, mobile device photos, and even AI tools. Understanding these evolving pathways is essential for building an effective prevention strategy.

Prevention Requires a Layered Approach

No single safeguard is enough. Effective protection combines strong legal agreements, clear technology-use policies, and technical security controls. Well-drafted confidentiality agreements, BYOD and AI-use policies, data loss prevention tools, multi-factor authentication, and data classification programs work together to reduce risk and improve defensibility when issues arise.

Watch for Behavioral Red Flags

Technical monitoring is important, but human behavior often provides the earliest warning signs. Unusual after-hours downloads, sudden interest in information outside an employee’s responsibilities, requests for expanded access, declining engagement, or communications with competitors can all warrant closer review. Early detection frequently makes the difference between preventing a loss and responding to one.

Speed and Documentation Are Critical When Someone Leaves

Organizations should have a well-defined departure playbook that includes exit interviews, certification of data return or deletion, forensic preservation procedures, and cross-functional coordination among Legal, HR, and IT. If misconduct is suspected, the first 72 hours are often the most important. Thorough documentation before, during, and after an employee’s departure can be invaluable in any subsequent investigation or litigation.

Final Thought

Protecting trade secrets is not solely a legal, HR, or IT responsibility. Success requires a coordinated, proactive approach that combines policies, people, and technology. Organizations that prepare before a high-risk departure occurs are far better positioned to prevent data loss and respond effectively when concerns arise.

To ensure you don’t miss future sessions, subscribe to our Litigation – Trade Secrets & Non-Competes mailing list. For tailored programs, our attorneys are available to present customized sessions for your organization. Subscribe to our Trading Secrets blog for ongoing insights on trade secrets, employee mobility, and information governance.

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Craig Melville, Unsplash

The North Carolina Business Court recently issued a decision that serves as a sharp reminder that California’s hostility to restrictive covenants can reach well beyond its borders—and attempting to enforce a void restriction may itself create liability.

BioSkryb, a North Carolina–based biotechnology company, removed one of its co-founders and former executives, Jason West, in 2024. Shortly thereafter, and following his resignation from BioSkryb’s board of directors, Mr. West formed a new venture, AClarity Genomics, Inc.

Suspecting that Mr. West had misappropriated trade secrets and other confidential information to launch a competing business, BioSkryb filed suit. Among other claims, it alleged breach of Mr. West’s employment agreements and sought injunctive relief. Those agreements included one-year employee and customer non-solicitation covenants, as well as California choice-of-law provisions.

Mr. West countersued, invoking a relatively new and still underdeveloped provision of the California Business and Professions Code, Section 16600.5. (We previously wrote about Section 16600.5, here). The statute provides that an employer that attempts to enforce a contract containing an unlawful restraint on trade commits a civil violation and may be liable for damages and attorneys’ fees. BioSkryb did not dispute that, through its lawsuit, it had attempted to enforce the challenged restrictive covenants.

Following discovery, BioSkryb voluntarily dismissed its affirmative claims, leaving only Mr. West’s counterclaim under Section 16600.5. Mr. West then moved for summary judgment on liability (but not damages).

The dispositive issue became whether California law governed the employment agreements. Both parties conceded that, if California law applied, the restrictive covenants at issue were void. Mr. West sought to enforce the agreements’ express choice-of-law provision. BioSkryb, in contrast, argued that the provision should be disregarded because the agreements lacked a sufficient connection to California.

On June 8, 2026, the court sided with Mr. West in an order granting summary judgment. It identified several undisputed facts establishing a reasonable basis for the parties’ selection of California law:

  • BioSkryb had at one point considered relocating its headquarters from North Carolina to California;
  • Although the company ultimately remained in North Carolina, one of its co-founders relocated to California;
  • BioSkryb held in-person board meetings in California, retained California-based corporate counsel, and required Mr. West to travel to California frequently—at least twenty-five times in connection with his duties.

The court further held that applying California law would not contravene a fundamental policy of North Carolina—a finding that, if otherwise established, could override a valid choice-of-law provision. To the contrary, the court noted that North Carolina, like California, disfavors restrictive employment covenants.

The court also addressed the extraterritorial reach of Section 16600.5(d). BioSkryb argued that applying the statute in a North Carolina forum would violate the presumption against extraterritorial application of state law. The court rejected that contention, concluding—consistent with a recent federal decision from Arizona—that the statutory language unambiguously reflects the California legislature’s intent for Section 16600.5 to apply beyond California’s borders.

Takeaway:

BioSkryb underscores the growing risk that California’s antipathy to non-competes, particularly Section 16600.5, poses to employers nationwide. Where a contract contains a California choice-of-law provision, even limited contacts with the state may be sufficient to trigger application of California law. And critically, the act of attempting to enforce restrictive covenants in other jurisdictions may now expose employers to affirmative liability.

BioSkryb Genomics, Inc. v. AClarity Genomics Inc.

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Sasun Bughdaryan, Unsplash

As part of Seyfarth’s 2026 Trade Secrets Webinar Series, our panel presented FTC Non-Compete Ban Two Years Later: Enforcement & Workarounds, examining how the non-compete landscape continues to evolve following the FTC’s abandoned rulemaking effort and the growing influence of state law.

Jesse Coleman, Gary Friedman, and Eron Reid led a practical discussion for in-house counsel, HR professionals, executives, and business leaders navigating an increasingly complex enforcement and compliance environment.

View the Recording – CLE credit for this recording expires on May 27, 2027. Please refer to the program description for jurisdiction-specific details and deadlines.

Key Takeaways

FTC Enforcement Has Shifted to a Case-by-Case Approach

Under new leadership, the FTC has moved away from attempting to impose a categorical ban on non-competes and instead is pursuing a case-by-case enforcement strategy. This approach applies a reasonableness standard similar to those long used by many states.

While the rulemaking effort may be behind us, federal scrutiny of restrictive covenants remains active—now focused on specific fact patterns rather than broad prohibitions.

Enforcement Is Targeting Overbroad Use of Non-Competes

Early enforcement actions indicate that the FTC is focusing on clear overuse and overreach, particularly where non-competes are:

  • Applied broadly across employee populations
  • Untethered to role, seniority, or access to sensitive information
  • Used as a default rather than a tailored protection

These actions reinforce that employers should avoid “one-size-fits-all” restrictions and instead ensure covenants are narrowly aligned to legitimate business interests.

Healthcare Remains a Key Area of Focus

The health care industry continues to be a priority for enforcement, particularly where restrictive covenants are perceived to limit patient choice or access to care.

Employers in this space should expect continued scrutiny of non-competes involving physicians and other clinical professionals, especially in highly competitive or underserved markets.

“Education Through Enforcement” Will Continue

The FTC is expected to continue leveraging targeted enforcement actions as a tool to shape the law, effectively providing guidance through test cases and settlements.

This “education through enforcement” approach means employers should closely monitor developments, as each action may further define the boundaries of acceptable restrictive covenant practices.

State Law Patchwork Is Expanding

At the same time, employers face an increasingly complex patchwork of state laws governing non-competes and other restrictive covenants. These laws vary significantly and may include:

  • Wage thresholds restricting enforceability
  • Advance notice requirements
  • Industry-specific limitations or outright bans

As a result, compliance must be managed on a jurisdiction-by-jurisdiction basis, with careful attention to applicable state requirements.

Uniform Agreements Are No Longer Sustainable

Given the divergence in state laws, multi-state employers can no longer rely on uniform agreements.

Instead, employers should consider:

  • Modular agreements that adjust based on employee location
  • State-specific templates tailored to local legal requirements

This approach helps balance enforceability with administrative efficiency while reducing legal risk.

Choice-of-Law Strategy Requires Reassessment

Employers should also re-evaluate whether to default to Delaware law when drafting restrictive covenants.

Although Delaware has traditionally been a preferred jurisdiction—particularly for companies incorporated there—its jurisprudence on restrictive covenants has shifted over the past several years and remains in flux.

Companies should:

  • Assess whether Delaware has a meaningful nexus to the employment relationship
  • Consider whether another jurisdiction tied to the workforce or business operations may provide a more reliable enforcement forum
  • Avoid reflexively selecting Delaware without evaluating current legal trends

Looking Ahead

Although the FTC’s non-compete rule is no longer in effect, the broader movement to limit restrictive covenants continues to gain momentum through both federal enforcement and state legislation. Employers should take a proactive approach by tailoring agreements, strengthening alternative protections, and staying attuned to ongoing legal developments.

To ensure you don’t miss future sessions, subscribe to our Litigation – Trade Secrets & Non-Competes mailing list. For tailored programs, our attorneys are available to present customized sessions for your organization. Subscribe to our Trading Secrets blog for ongoing insights on trade secrets, employee mobility, and information governance.

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Adrien, Unsplash

REGISTER HERE

Thursday, June 18, 2026
1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific

About the Program

When an employee resigns, what walks out the door with them? In today’s environment of remote work, cloud storage, and generative AI tools, the answer is often more than employers realize—and the window to respond is narrow.

Join Seyfarth for the next installment of our Trade Secrets Webinar Series, where our cross-functional team will provide a practical, real-world look at how digital exfiltration occurs and what organizations can do to prevent and respond to it.

Drawing on experience across trade secrets law, cybersecurity, and digital forensics, our speakers will break down the key legal, technical, and operational considerations every employer should understand.

Key Discussion Points

  • Why digital exfiltration risk is increasing in a remote, cloud-based, and AI-enabled workplace
  • Common methods employees use to take sensitive data—and how to identify red flags
  • High-risk data categories and where organizations are most vulnerable
  • Best practices for confidentiality agreements and restrictive covenants
  • Designing effective offboarding protocols and exit procedures
  • Technical safeguards, including monitoring tools and data loss prevention strategies
  • How to investigate suspected exfiltration and preserve forensic evidence
  • Immediate response strategies, including demand letters and injunctive relief
  • Risks and considerations for the hiring (new) employer

This webinar is designed for in-house counsel, HR professionals, IT and security leaders, and business executives responsible for safeguarding confidential information and managing employee transitions.

Speakers

Jay Carle, Partner, Seyfarth Shaw LLP

Marcus Mintz, Partner, Seyfarth Shaw LLP

Joe Greenfield, President & Chief Forensic Examiner, Maryman

REGISTER HERE

If you have any questions, please contact Sela Sofferman at ssofferman@seyfarth.com and reference this event.

Learn more about our Trade Secrets, Computer Fraud & Non-Competes practice.

To comply with State CLE Requirements, CLE forms requesting credit in IL or CA must be received before the end of the month in which the program took place. Credit will not be issued for forms received after such date. For all other jurisdictions forms must be submitted within 10 business days of the program taking place or we will not be able to process the request.

Our live programming is accredited for CLE in CA, IL, and NY (for both newly admitted and experienced).  Credit will be applied as requested, but cannot be guaranteed for TX, NJ, GA, NC and WA. The following jurisdictions may accept reciprocal credit with our accredited states, and individuals can use the certificate they receive to gain CLE credit therein: AZ, AR, CT, HI and ME. For all other jurisdictions, a general certificate of attendance and the necessary materials will be issued that can be used for self-application. CLE decisions are made by each local board, and can take up to 12 weeks to process. If you have questions about jurisdictions, please email CLE@seyfarth.com.

Please note that programming under 60 minutes of CLE content is not eligible for credit in GA. programs that are not open to the public are not eligible for credit in NC.

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Dawn Mertineit, Marcus Mintz, and Michael Wexler, co-chairs of Seyfarth’s national Trade Secrets, Computer Fraud, and Non-Competes practice, are among the contributing authors to the Chambers Trade Secrets 2026 Global Practice Guide.

Mertineit, Mintz, and Wexler authored Chapter 13, “USA Trends and Developments,” examining the evolving US legal landscape governing restrictive covenants, trade secret protection, and employee mobility.

The chapter provides a detailed analysis of the Federal Trade Commission’s abandoned effort to impose a nationwide non-compete ban, the continued expansion of state-level restrictions, and emerging judicial trends that are reshaping how businesses protect confidential information. The authors also explore how technological advances, remote work, and high-stakes litigation are increasing both trade secret risk and enforcement complexity. 

They explain that regulatory scrutiny remains intense despite the FTC’s withdrawal of its rule:

“The regulatory pressure is far from disappearing, and businesses operating in the United States must carefully safeguard their intellectual property in the event their restrictive covenant agreements are struck down or otherwise limited.” 

The full chapter is available in the Chambers Trade Secrets 2026 Global Practice Guide.

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Aida L, Unsplash

Thursday, May 28, 2026
1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific

REGISTER HERE

About the Program

Two years after the FTC’s landmark final rule on non-compete agreements, and more than a year after the rule was set aside by a federal court, employers are still navigating a rapidly evolving landscape shaped by litigation, state law developments, enforcement priorities, and shifting strategies to protect competitive interests.

While the legal challenges to the FTC rule have abated and the rule has been taken off the books, the broader movement toward limiting restrictive covenants continues to gain momentum at the state level across the country. Now more than ever, employers must evaluate how to safeguard talent, confidential information, customer relationships, and business value in an environment where traditional non-compete agreements face increasing scrutiny.

Join us for the next installment of Seyfarth’s 2026 Trade Secrets Webinar Series, where Seyfarth attorneys will examine where things stand now and what employers should be doing next.

Key Discussion Points

  • Where FTC efforts against non-competes stand two years later: litigation, enforcement, and regulatory outlook
  • How state legislatures and courts are reshaping the restrictive covenant landscape
  • Practical workarounds and alternative protections employers are using now
  • Strengthening trade secret, confidentiality, and customer relationship protections
  • Best practices for updating agreements, policies, and onboarding/offboarding processes
  • What employers should be watching for in 2026 and beyond

This webinar is designed for in-house counsel, HR professionals, business leaders, and executives seeking practical guidance and actionable strategies to help their organizations stay compliant while protecting key business interests.

Speakers

Jesse Coleman, Partner, Seyfarth Shaw LLP
Gary Friedman, Partner, Seyfarth Shaw LLP
Eron Reid, Associate, Seyfarth Shaw LLP

REGISTER HERE

If you have any questions, please contact Sela Sofferman at ssofferman@seyfarth.com and reference this event.

Learn more about our Trade Secrets, Computer Fraud & Non-Competes practice.

To comply with State CLE Requirements, CLE forms requesting credit in IL or CA must be received before the end of the month in which the program took place. Credit will not be issued for forms received after such date. For all other jurisdictions forms must be submitted within 10 business days of the program taking place or we will not be able to process the request.

Our live programming is accredited for CLE in CA, IL, and NY (for both newly admitted and experienced).  Credit will be applied as requested, but cannot be guaranteed for TX, NJ, GA, NC and WA. The following jurisdictions may accept reciprocal credit with our accredited states, and individuals can use the certificate they receive to gain CLE credit therein: AZ, AR, CT, HI and ME. For all other jurisdictions, a general certificate of attendance and the necessary materials will be issued that can be used for self-application. CLE decisions are made by each local board, and can take up to 12 weeks to process. If you have questions about jurisdictions, please email CLE@seyfarth.com.

Please note that programming under 60 minutes of CLE content is not eligible for credit in GA. programs that are not open to the public are not eligible for credit in NC.

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Morgan Lane, Unsplash

In the first quarter of 2026, state legislatures have continued to limit the use of restrictive covenants with employees, with the most industry-focused limitations once again being in health care.

This post tracks recent changes in non-compete law for Q1 2026 throughout the country, provides key takeaways, and maps out the current landscape.

KEY TAKEAWAYS

  1. Washington effectively banned all non-compete agreements, including in the health care industry. 
  2. Virginia enacted a new law prohibiting the enforcement of non-compete agreements when an employee is terminated without cause unless the employer provides severance or other monetary payment.  The legislature also passed legislation which will effectively ban non-compete agreements with health care professions, and is now weighing recommendations from the governor.
  3. Utah enacted legislation prohibiting non-compete agreements with health care workers, and
  4. Montana expanded its prohibition on non-compete agreements with healthcare providers to include any physicians.   

CURRENT LANDSCAPE

The landscape regarding permissibility of medical non-compete agreements for health care providers has shifted considerably since June 2025:

STATE LEGISLATIVE DEVELOPMENTS

Washington

  • The Washington legislature passed H.B. 1155 on March 23, 2026.[1]  The new law, which is effective on June 30, 2027, bans all noncompetition covenants with Washington-based workers and businesses.  Moreover, employers must make a “reasonable effort” to provide their current and former employees with written notice that current noncompete agreements are now void and unenforceable by October 1, 2027.  The new law also expands the definition of “noncompetition covenants” to include agreements that require an individual to return, repay, or forfeit any right, benefit, or compensation with limited exceptions for educational expenses.  Narrower categories of non-solicitation agreements are still permissible under the new law, provided the employee established or substantially developed a relationship during their employment and the agreement expires 18 months after separation.

Virginia

  • Virginia enacted a new law which bars enforcement of non-compete agreements against employees (health care or otherwise) discharged without cause unless the employer provides severance benefits or monetary payment.  The employer must disclose the severance benefits or monetary payment upon execution of the non-compete.[2]  This new law also expands rights to sue for violations to all employees.  This law will not effect agreements entered into, amended, or renewed before the law’s effective date of July 1, 2026.
  • The Virginia legislature passed a law which would broadly prohibit any employer from entering into, enforcing, or threatening to enforce a non-compete agreement with a health care professional.  This law defines a “health care professional” as any person licensed, registered, or certified by the Borad of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work.  On April 11, 2026, Governor Spanberger proposed an amendment to a provision in the bill regarding non-solicitation agreements which would permit providers to inform patients of the provider’s new contact information and patients’ right to choose a provider.  The legislature will consider this recommendation when it reconvenes on April 22nd.  If passed, the bills will be sent to the governor for signature who has an additional 30 days to sign the bills.

Utah

  • Effective May 6, 2026, employers may no longer enter into non-compete agreements with health care workers.  Additionally, the new legislation voids non-solicitation agreements that prevent health care workers from informing patients of their current or future workplace.  The legislation defines a “health care worker” as an individual licensed and practicing in a wide range of clinical professions, including doctors, nurses, psychologists, and mental health counselors.

Montana

  • Montana continued to expand its law prohibiting non-compete agreements with certain health care providers.  Effective January 1, 2026, Montana now prohibits non-compete agreements with any physician.  Previously, non-competes were previously prohibited for psychologists, social workers, and enumerated categories of mental health counselors.

California

  • New legislation aimed at curbing the influence of private equity groups and hedge funds in health care went into effect on January 1, 2026.  The new legislation broadly bans contractual clauses prohibiting a provider from competing with a medical or dental practice if the provider is terminated or resigns from all contracts involving the management of a physician or dental practice and private equity groups or hedge funds.  The practical effect of the new law will likely be negligible, as California has effectively banned most non-compete agreements for decades.

New Threshold Shifts

Compensation thresholds continue to shift, with Colorado, the District of Columbia, Maine, Oregon, Rhode Island, and Virginia updating eligibility levels for employees who can be bound by restrictive covenants.

Pending Legislation

Some states whose legislatures are still in session have pending legislation which, if passed, will affect noncompete agreements with healthcare providers in Iowa and Maine.  Most notably though, the Virginia legislature will consider the governor’s recommendation to the legislature’s effective ban on non-compete agreements with health care professions when it reconvenes on April 22nd.  Stay tuned for another update this summer as the landscape continues to shift.

[1] See our earlier full coverage on this new law.

[2] See or earlier full coverage of recent legislation in Virginia here. 

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Amina Atar, Unsplash

On March 5, 2026, we previously advised that Virginia’s Senate Bill 170 introduces new limitations on the enforceability of restrictive covenants by protecting employees who are terminated without cause. Effective April 13, 2026, that bill became law.

What Virginia Employers Need to Know

Non-competes entered into after July 1, 2026, will become unenforceable if the employer terminates the employee’s employment without cause and does not provide severance benefits or other monetary payments to the employee.

Non-competes include both traditional prohibitions on competition and, pursuant to recent case law, employee non-solicit covenants.

The severance benefits or other monetary payments must be disclosed at the time the non-compete agreement is entered into.

The new law will become effective July 1, 2026 and only applies prospectively.

Violations of Virginia’s law may result in liability to employers. First, employees will be authorized to bring a civil action against any employer who attempts to enforce a non-compete in violation of the law. Any successful employee will be entitled to recover reasonable costs, fees for expert witness, and attorneys’ fees. Second, employers who violate the statute face civil penalties of $10,000 per violation, paid into the Commonwealth’s general fund.

What Virginia Employers Need to Do

Any employer who may hire employees in Virginia post-July 1, 2026, and desires to use a non-compete agreement, needs to update their restrictive covenant agreements to provide for “severance benefits or other monetary payments to the employee.”