How to protect your trade secrets when dealing with employees or contractors

A company should have a comprehensive policy regarding the disclosure, use, and return of its confidential information. Aside from that, the best practices to follow include:

  • Conducting due diligence on new hires or contractors should their work involve use or knowledge of your trade secrets - Background checks can be made to ensure a potential employee has not been involved in any type of misappropriation of trade secrets and or activity deemed untrustworthy. Trusting the wrong person can cause untold damages to a company. In the same way a potential employee does research on the company they intend to work for, the company should do the same with regards to the potential employee.
  • Utilizing confidentiality and non-disclosure agreements - The agreement should clearly state what information is a secret, that disclosure of said information is forbidden, any penalties that occur should said information be disclosed, and the obligation of the employee or contractor to return anything with the information in it. Creating a non-disclosure agreement can continue to be beneficial in the long run, especially after an employee leaves the company.
  • Physical preventative measures that can be used, including labels, e-mail protection, surveillance, and key cards - Access to confidential information should be identified as or marked “confidential.” Access through technology should start with protections like passwords. This will put your employee on notice that this information is not to be shared. Policies should express that information should not be disclosed through emails or social media. Employees should also be told not to disclose information to other employees who do not necessarily need to know said information. At the end of the work day, all information should be removed from the premises and disposed of properly. Nothing involving the information should go home with any employees. Include protection of trade secrets in employee training and staff meetings every so often. Security systems such as surveillance can be installed in areas where the trade secrets are stored. Security guards can be used outside rooms where trade secrets are used and or discussed. Access to rooms such as these should require key cards or keys. Computers should also be installed with security systems such as passwords or firewalls. Basically, the information is secretly kept and only available to a certain amount of employees.
  • Exit interviews conducted to remind a departing employee or contractor of his or her legal obligations and the consequences of not fulfilling them in regards to the handling of trade secrets disclosed to them during their time of employment – the departing employee should be given any confidentiality agreements they had signed at the start of their employment. Also determine whether or not the employee would have any information stored anywhere besides workplace mediums.
    Do not forget to terminate all of a departing employee’s forms of access into your business’s resources once they leave and to make sure the employee returns anything belonging to the company such as a cell phone, laptop, or files. Change passwords or ID scans. At the end, the departed employee should have nothing connected to or granting access to the trade secrets and should be fully aware of the fact of their obligation to keep the information undisclosed.
  • Informing a competitor of a binding confidentiality agreement should your ex-employee or contractor move on to work for the competitor.

Our firm develops internal and external policies for companies, which can be utilized within a wide range of business operations. Should you have any questions or require additional information, please contact us via email or phone listed on the website. 

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.