Avoiding Trade Secrets Liability When You Lose an Employee

Your trade secrets give you an edge in the market and can make or break your company.

When an employee departs with valuable assets like confidential information, you run the risk of losing that edge.

Find out how to avoid trade secrets liability when you lose an employee here.

Understanding Trade Secrets

The World Trading Organization and international treaties define trade secrets. If a piece of information has commercial value because it is secret, you are legally entitled to keep it secret to avoid unfair competition.

State law and global treaties protect your trade secrets.

In 2016, the Defend Trade Secrets Act came into force. This is another layer of legal protection against trade secrets misappropriation in the United States.

Safeguarding Your Trade Secrets

Your first aim should be prevention.

When training new talent, stress the importance of protecting your company’s assets. Make sure your employees are aware of the policies in place. Encourage a company culture of respecting confidential information.

You should also ask employees to sign non-disclosure and trade secret agreements.

These will ensure that your case stands in court. They will also dissuade your employees from leaking confidential information.

When you ask your employees to sign such an agreement, you should emphasize the importance and make it a company-wide event. That way, everyone is aware of the importance.

To make sure you are protecting your interests, you should team up with a commercial litigation attorney. They can help you draft your trade secret agreement.

During Employment

You should have measures in place to check employee access of confidential information.

Employees might be misusing proprietary information from departments they don’t have access to. They might also misuse information that belongs to another employee. These issues can lead to trade secret leaks, so you have to deal with them proactively.

If an employee has remained in a key position for too long, you might consider switching them to another position. That way, you will avoid exposing all your trade secrets to a single individual.

The Exit Interview

You should also have measures in place for when employees quit your company.

The first step here is a concise exit interview. During the interview, you or your managers should aim to gain the following information from a departing employee:

  • Why they are leaving your company
  • Whether they still possess company equipment or intellectual property
  • Whether they still have access to the company’s computer systems
  • Name and contact details of their new employer
  • The duties and responsibilities of their new position

Finally, after you get answers to the questions above, you should make sure that your employee understands their legal obligations.

Protect Your Business Interests

Here at Manfred Sternberg & Associates, we take a practical, service-oriented approach to practicing law.

We seek the best course of action for each issue and we encourage resolution through negotiation over litigation. We specialize in trade secrets, collections, commercial law, business law, and consumer matters law.

Contact Manfred Sternberg & Associates to schedule your free initial consultation to discuss your legal requirements today.

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