PREDICTIONS FOR 2026
EMPLOYEE DEFECTION AND TRADE SECRETS
2025 PREDICTIONS RECAP
The FTC Isn’t Done – Healthcare Will Become Ground Zero Even with a scaled-back agenda, the FTC will target non-competes and mobility-restricting agreements in
The administration replaced key agency leadership early, and federal momentum for a nationwide non-compete ban vanished almost instantly. The NLRB GC’s aggressive theories faded, and FTC/DOJ priorities shifted elsewhere. As predicted, federal pressure eased significantly, but employers still needed to watch other fronts. Feds Retreated on Non-Compete Regulation While federal regulators stepped back, we correctly identified that blue states would surge forward. 2025 saw new and expanded limits on non-competes, stay-or-pay rules, and mobility-restricting agreements in states like California, Washington, and Colorado. Attorneys general became increasingly vocal about business-to-business no-poach agreements and “unfair competition” theories tied to mobility restrictions, exactly the pattern we expected. Blue States Picked Up the Torch We predicted more overlap between privacy laws and trade secret theft, and that’s exactly what happened. Departing employees triggered not only trade secret claims but also data- access, data-transfer, and consumer-privacy violations when they downloaded or transferred sensitive information. Plaintiffs used privacy statutes as new leverage points, and defendants had to navigate a more complex liability landscape. Trade Secrets + Data Privacy Collided
healthcare, including B2B no-hire arrangements. Expect more enforcement actions focusing on competition in the labor market even without a federal non- compete ban. Noteworthy Local Trends Will Reshape the Landscape 2026 will bring major local developments that create real compliance headaches for multi-state employers: • Florida’s CHOICE Act will produce its first mandatory injunctions, raising fights over how federal courts apply state substantive law versus federal procedure. • New York City will ban non-competes, setting up a jurisdictional clash with the state legislature. • California courts will clarify the reach of its non-compete ban and confirm that California employers can still enforce lawful restrictive covenants in other states where they’re permitted. AI Will Become a Central Player in Trade Secret Battles Trade secret litigation will increasingly revolve around AI systems. We’ll see AI notetaker transcripts, voice records, and auto-summaries become critical discovery material. Employees departing with custom AI agents or model-trained assets will give rise to new misappropriation claims. And courts will wrestle with ownership questions involving model weights, training sets, and AI-generated engineering artifacts. This means employers will need stronger controls around AI-enabled workflows, clearer IP assignments, and updated exit protocols.
Michael P. Elkon Atlanta Partner, Co-Chair
Robert Yonowitz Irvine Partner, Co-Chair
Jonathan Crook Charlotte Partner, Founder - Blue Pencil Box
OUR PREDICTIONS WERE CORRECT
HOW DID WE DO?
David J. Walton, AIGP, CIPP/US Philadelphia Partner
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