As a business owner, you may have invested time, money and talent in developing procedures and processes. Departing employees may take these trade secrets with them and cause financial and legal problems unless you take advantage of business law and use other protections.
Trade secret information
There are disagreements on what constitutes a valid trade secret. Generally, a trade secret is a business’ private information such as formulas and processes. This confidential information typically includes items that are not known by others in the field outside that business and information that is independently valuable.
Trade secrets typically do not include items that were published or generic or information possessed by an employee before joining the company. For example, an engineer may keep public records for issued patents while salespeople could take their contacts list that they brought to the company.
There are ways to help avoid trade secret disputes. Employers should enact policies requiring employees to seek permission before taking any desirable information when they leave employment.
Employers and workers should cooperate and assure that employees do not leave with files that were unintentionally left in their PEDs, thumb drives, briefcases, or backpacks. They need to verify that confidential information was not backed up on devices or contained in saved e-mails.
Most trade secret disputes are settled without going to trial. Settlements typically involve the employee’s return of the information. Sometimes they may agree to inspection of their PEDs to assure that no information remains on these devices.
Many subsequent employers have paid for the worker’s legal defense if it believes that the trade secret allegations lack merit. But subsequent companies have also terminated new employees for taking information from their last employer.
Employees taking trade secrets may face criminal prosecution in serious cases. Earlier this month, a former Silicon Valley Google employee was sentenced to 18 months imprisonment.