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Protecting Trade Secrets

INFORMATION POLICIES NEED TO ADAPT IN THE NEW WORKPLACE 

By Paul Mersino and Bernie Fuhs 

With employees leaving their jobs at an increased pace, many are referring to the current environment as “The Great Resignation.” This is partially due to burnout, re-evaluation of what is important in life, and employees getting used to working from home. For businesses, it raises a big concern how to protect confidential information in this new world.   

Here are five tips for protecting trade secrets in this new environment: 

  1. PERFORM AN AUDIT OF ALL EMPLOYEE AGREEMENTS 

This includes confidentiality, non-solicitation, and non-compete agreements. Pay close attention to employees who handle sensitive information and have policies to protect that information.  Companies should have digital use policies that clearly tell employees what they can and cannot do with electronic information, digital documents, and company computers.


  1. CONDUCT EXIT INTERVIEWS

When an employee leaves, they should be reminded if they have restricted covenants and clearly told what they are prohibited from doing. It is good practice to send the employee a letter reminding them of their obligations and attaching a copy of any agreements. It could also be a strong piece of evidence should litigation occur.


  1. AUDIT WORK-FROM-HOME POLICIES

While working from home has been great for many, it also brings risks. Whether employees are in the office or at home, companies must take proper measures to protect digital and electronic information. Make sure policies are up to date. What worked two years ago may not now.   

Policies should address remote working and rules for portable storage devices, downloading, use of VPNs, and more. Security measures should be taken to protect shared drives from outside hackers as well as from improper downloads and transfers internally. Also consider whether employees are permitted to use computers for both work and personal purposes, the lack of privacy when remote, and other considerations not present when everyone was in the office.  You must even consider the steps you take to protect information while using videoconferencing.


  1. REMIND CURRENT EMPLOYEES OF THEIR OBLIGATIONS

Do not forget about employees who stick around.  Departures are an opportunity to remind current employees about their obligations as well. Emphasize the importance of keeping information confidential. Trade secret misappropriation is sometimes carried out by those who truly did not know they were doing something wrong. Make sure it is clear.


  1. GET EXPERTS INVOLVED QUICKLY

If you suspect someone stole company information, contact your attorney and possibly an outside IT forensic expert to preserve and analyze electronic information. A cease-and-desist letter or even an immediate lawsuit may be appropriate. But you must act fast.   

COVID changed many things, but it has not changed the need to be smart about protecting your most valuable assets.


Paul Mersino and Bernie Fuhs are attorneys for Butzel, a leading Detroit law firm, and are both members of its Non-Compete/Trade Secret Litigation Team.