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How Tech Companies May Mitigate Risk When Expanding Operations in Ohio
How Tech Companies May Mitigate Risk When Expanding Operations in Ohio

At the beginning of 2022, semiconductor chip manufacturer Intel Corporation announced plans for a massive expansion into Ohio. Intel intends to make an initial investment of more than $20 billion in the construction of two new leading-edge chip factories near Columbus. To support its planned expansion, Intel also pledged $100 million toward partnerships with educational institutions to create a pipeline of talent and bolster research programs in the region.

Intel broke ground on the Licking County site in September 2022. In addition to generating 7,000 construction jobs and 3,000 long-term positions in manufacturing and engineering, the site will eventually support tens of thousands of additional local long-term jobs across a broad spectrum of suppliers and partners. This investment (and recent federal legislation such as the CHIPS and Science Act, which provides over $50 billion in federal incentive funding and tax credits to help the American semiconductor industry reshore manufacturing and invest in the next generation of technology) represents an exceptional opportunity for Ohio residents and companies, while highlighting some of the unique challenges tech companies may face when starting or growing operations in the Buckeye State.

Mitigating Onboarding Risks With Comprehensive Labor and Employment Practices and Policies

Sudden demand for workers with skills more common in Silicon Valley than Ohio has created fierce competition among local tech companies. In this environment, companies may struggle to develop and adhere to best practices to protect the business in the long run. Onboarding new talent today can create future risk, including employment law claims and intellectual property violations (more on that below). Ensuring company recruiting practices, background checks, offer letters, employment contracts, benefits packages, and overall employment policies and practices are legally compliant and consistent with best practices will help minimize those risks.

In addition to mitigating risks, the lucrative federal incentives and tax credits provided to companies expanding or making investments require transparent and strategic workforce planning. This includes outreach and recruitment for diverse and underserved communities and collaboration with state and local apprenticeship programs and academia to ensure a long-term supply of highly trained workers for Ohio's semiconductor industry for decades to come.

Protecting IP Is Critical, Both on the Employee and Client Fronts

When a company like Intel negotiates a contract with a prospective partner or customer, the parties may commit themselves to years of product delivery and millions of dollars in development costs. All it takes is one former employee advising a smaller competitor of the opportunity, or improperly disclosing confidential information, for a big business to lose its next major project and whatever it invested in that project. Even worse, some applicants for the thousands of jobs this project will create may have improper motives, such as theft of confidential, proprietary and trade secret information of their employer.

At an on-boarding stage, technology companies must consider how to protect their intellectual property both during and after a new hire's time with the company. To that end, employers should develop and require employees to sign several key agreements such as: nondisclosure of confidential information, assignment of intellectual property rights, nonsolicitation of customers, nonsolicitation of employees and in appropriate circumstances, covenants not to compete. Those agreements can be included in a larger employment agreement, or be contained in a stand-alone agreement for employees not signatory to an employment agreement.

Engage a Law Firm That Understands the Intersectionality of Corporate Legal and Compliance Issues

The attorneys at Calfee, Halter & Griswold represent numerous clients in the technology sector in multiple practice areas, including Corporate and Finance, Intellectual Property (including patent prosecution, patent portfolio management, and IP litigation), Government Relations, Labor and Employment, Employee Benefits and Executive Compensation, Litigation, and Insurance Coverage, among other areas. Our Washington, D.C. office includes a Federal Government Relations practice well-versed in relevant initiatives such as the CHIPS Act. With offices across the state of Ohio and Washington, D.C., we collaborate closely with our clients and with our partners across our practice areas to ensure that we identify and deliver the most efficient and strategic legal solutions available. We look forward to working with tech companies expanding or opening operations in the Buckeye State, as well as the companies providing services that support tech growth in Ohio.

Learn More

Learn more about our commitment to business in Ohio here: https://www.calfee.com/calfee-supports-businesses-ohio, or contact the authors of this blog post.

Calfee Connections blogs, vlogs and other educational content are intended to inform and educate readers about legal developments and are not intended as legal advice for any specific individual or specific situation. Please consult with your attorney regarding any legal questions you may have. With regard to all content including case studies or descriptions, past outcomes do not predict future results. The opinions expressed may not necessarily reflect the view points of all attorneys and professionals of Calfee, Halter & Griswold LLP or its subsidiary. Updates related to all COVID-19 government assistance programs are provided with the most current information made available to Calfee at the time of publication. Clarifications and further guidance are being disseminated from government authorities on an ongoing basis. All information should be reaffirmed prior to the submission of any application and/or program participation.

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