Trade secrets are among the most critical yet often overlooked assets of any organization. And they aren’t always as sophisticated as proprietary software or as famously secret as Coca-Cola’s formula. A trade secret can be as seemingly innocuous as a customer list, business strategy, policy manual or pricing sheet.
When looking to protect yours, the first line of defense should be following the advice of your attorney. But your HR staff and policies can also play critical supporting roles in stopping trade secrets from walking out the door.
For starters, create an internal employee policy dealing with the care and keeping of confidential information. Only those needing access to trade secrets should be able to get to them.
Control access to physical facilities where documents related to trade secrets are kept. Just as important, if not more so, establish strong technological safeguards to prevent unauthorized access to servers and hard drives where confidential data is stored.
Whenever you must share trade secrets with a third party, first get approval from your legal counsel. Then, require the third party to sign a nondisclosure agreement stating that the information is confidential and proprietary to your organization.
Also incorporate nondisclosure language into employment applications and job descriptions for sensitive positions. And ask key employees to sign a noncompete agreement that contains language specific to trade secrets.
When employees leave your organization, you should conduct exit interviews to, in part, remind them of their obligation to maintain confidentiality. During the interview, use a checklist to ensure all intellectual property has been returned. And change passwords and take other security measures after the employee departs.
If necessary, send a letter to the former employee’s new employer, advising them that this person had access to trade secrets as well as confidential information and has a continuing duty not to disclose it. But don’t overstate your company’s rights to confidentiality or cast the former worker in a negative light.
Everything in your power
A well-protected trade secret can mean the difference between keeping a competitive edge and losing it. Make sure you regularly take inventory of your trade secrets. Then do everything in your power to protect them. Our firm can provide more information and further guidance.