How can health care employers use non-competes and other restrictive covenants to protect trade secrets? Attorneys Erik Weibust and Katherine Rigby explore the options available to employers, in an article for Law360.

Following is an excerpt:

The health care industry is vast and encompasses a wide array of businesses as diverse as pharmaceutical and biotechnology companies, medical device manufacturers, contract research and manufacturing organizations, hospital systems and physician practices, health insurers, pharmacies, research universities, diagnostic testing laboratories, and many others.

While these businesses may seem to an outsider to have little in common beyond sharing the goal of improving patient outcomes and health care delivery — and even then, their perspectives and methods often vary — one other thing they all undoubtedly share is the need to protect their most sensitive information.

While some health care companies are, of course, subject to the Health Insurance Portability and Accountability Act and other statutes that protect patient records, all health care companies, regardless of the nature of their business, have other types of information that they would like to keep secret: formulations, designs, viability and optimization data, manufacturing processes, research and development programs, profit margins and other financial information, sales forecasts, algorithmic models, customer lists, and so on.

And while some of these may be better off patented, certain information either is not patentable or is more valuable if maintained as a trade secret. Indeed, often the most sensitive information is developed before a company is ready to apply for a patent and should be kept secret at least until it does so.

Download the full article in PDF format: How to Protect Health Care Trade Secrets with Covenants