Trade secret protection is increasingly important and difficult due to the easy accessibility and transportability of data and information. You trust your employees with trade secrets, but how can you keep them from leaving with your valuable information?
The first step in protecting your trade secrets is identifying them. A trade secret includes information that gives you a leg-up on the competition. Trade secrets might include company formulas, computer programs, customer lists, or manufacturing processes essential to company business.
After taking inventory of your trade secrets, develop comprehensive company policies that protect them. These policies might address electronic monitoring, removable media protocol, or the use of email, internet, and social media. Consistently and thoroughly train employees on these policies. This will create a culture of confidentiality in which trade secrets are treated as such among employees in the office. This reduces the likelihood of inadvertent disclosures and deters intentional ones.
Procedures for Protecting Trade Secrets During Employee Departures
Once an employee makes the decision to end their employment with your company, outside of a direct non-compete or non-disclosure agreement with a former employee, there are several procedures that can be put in place to ensure that an employee does not take your valuable information with them.
First, before the employee has left, identify behavior or characteristics that suggest that a breach of confidentiality may occur upon departure. This might include the employee’s feeling of anger or resentment about their departure, divided loyalty between your company and a rival, or a tendency towards compulsive or destructive conduct. Identifying this behavior early will allow you to keep a close eye on the employee’s conduct just before departure. If you notice these characteristics, you might consider taking extra precautions such as terminating access to company data early and involving your IT department to determine whether any information has already been taken.
Second, prohibit the employee from taking anything other than personal items with them upon departure. Likewise, you should require the employee to return all business equipment, documents, and data in their possession–including company-issued cell phones and laptops. Confirm that this process has been followed in the exit interview. If you suspect or have determined that the employee has confidential information off site, you should arrange to have someone accompany the employee to retrieve the information. This is particularly important in a time in which many employees worked remotely during the COVID-19 pandemic and may have had access to valuable information outside of the security of your office.
Third, if there is any doubt that the employee has taken valuable information, it is important to swiftly investigate and collect evidence. Determine what information the employee retained, how they obtained it, and what they have done with it. This information will be essential if you decide to bring a legal claim against your former employee. Your investigation may include interviewing the employee’s co-workers to determine whether the employee had plans of working for a rival company, monitoring the employee’s social media activity, conducting a forensic examination of the employee’s hard drive, and reviewing the employee’s general business activity prior to departure.
Trade Secret Protection Litigation
Trade secret protection litigation may be litigated in federal district court, including the Eastern District of Virginia (EDVA). Our firm practices regularly in the EDVA, with a particular focus in the Alexandria Division. This litigation also arises often in our local Virginia jurisdictions, including Fairfax County, the City of Alexandria, or Arlington County. Washington, DC, is another common jurisdiction in which we see this litigation, due to a number of business headquarters locally.
For more information about trade secret protection and your business’s options, contact one of our Corporate Attorneys at 703-535-7809.
