March 1, 2019

Protecting Business Secrets in a Mobile Workforce

by Michael A. Smith, Carlile Patchen & Murphy LLP

Today, it is common for employees to transition through several employers during their careers. So how does a business protect its trade secrets and confidential information from going out the door with departing employees?

In general, Ohio law protects trade secrets as long as they are protected by the employer. The essential questions then become “what is a trade secret,” followed by, “what must an employer do to protect it?”

A trade secret derives independent economic value from not being generally known and is subject to a reasonable amount of secrecy. Obvious trade secrets include: customer lists, manufacturing processes, secret formulas and more.

One way to maintain sensitive information is to make employees aware of the confidential nature of the information they have access to. This can be accomplished through an employee handbook or a contractual agreement. Contractual restrictions take many forms and are often incorporated in an Employment Agreement or a Non-Competition Agreement. A non-compete agreement should be carefully tailored to the specific situation and employee.

The most useful contractual means of protecting trade secrets may be to have all employees sign a Confidentiality/Non-Disclosure Agreement when hired. If properly prepared, these Agreements should specify the confidential nature of the information employees are given access to and specify how that information is to be protected and returned in the event of termination.

Another means for protecting sensitive information is to keep it separate from non-sensitive information. Such steps may include: limiting computer access to sensitive information, enforcing a sign-out procedure documenting access to sensitive information, keeping adequate backup records, destroying or otherwise removing sensitive information from the premises when not otherwise required to be maintained at the workplace.

One final way to attempt to protect sensitive information is to conduct an exit interview with all departing employees that emphasizes the employer’s expectation that the employee will continue to respect the employer’s proprietary business information. This is also a good time to remind the employee of any agreement that restricts the employee after leaving the company.

Read the full post at https://www.cpmlaw.com.


Smith
A trade secret derives independent economic value from not being generally known and is subject to a reasonable amount of secrecy. Obvious trade secrets include: customer lists, manufacturing processes, secret formulas and more.