A Crain’s Detroit Business article, “As titanic industry changes loom, auto suppliers turn to lawyers for help,” discusses the recent Federal Trade Commission action to ban most noncompete agreements.
Although the rule is already being challenged in court, Zainab Sabbagh, a partner in the Detroit office of Warner Norcross + Judd LLP, is encouraging her supplier clients to re-think how they keep confidential information safe.
"Even though you are getting rid of noncompete agreements, that doesn't mean there aren't other ways to protect your business interests," she said.
Sabbagh suggested, “parts makers could introduce targeted non solicitation agreements with their suppliers to prevent them from competing for the same programs or customers. Likewise, suppliers should review employment agreements to make sure that any nondisclosure agreements explicitly lay out what information is considered confidential that an employee could not share if he or she leaves for a job at a competitor.”
Sabbagh encouraged suppliers to clearly define what information is considered confidential. "Most of the time, the court is going to limit you to what you defined as confidential in your agreement. So, if you haven't defined what's actually important to you, you might be out of luck if you go to court," she said.
Crain’s Detroit Business subscribers can read the complete story here.
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