What do you do if an employee steals trade secrets?

Why would an employee still trade secrets? What will it do to your business? What are your options once it has already happened?

An employee typically steals trade secrets for one of two reasons. They either leave your company and go work at a competitor or they start up their own business and become the competitor.

Examples of trade secrets, which can be anything of business value, include:

• An idea for a unique product
• Software
• Customer data lists
• Marketing information

Then you will not only be at a disadvantage, but your former employee may have just stolen a competitive edge.

What are your options once it is all said and done?

Any company that has trade secrets should have had attorneys draft legal contracts for owners and employees to sign before they begin working on the projects. It’s important to always protect valuable information.

If they have not, a business’s options may depend on state laws. For instance, in California, in order to protect trade secrets, an employer must have already made reasonable efforts to maintain the secrecy of the information, and chances are, if they don’t have the Confidentiality Agreements in place, they have no made those efforts.

Always speak to a qualified and experienced attorney to see what your rights and options are in your state. While you may have lost some information when your employee left, it’s not too late to try to protect your company.

Some tips for protecting your business’s trade secrets include:

• Consult with an attorney and create Confidentiality Agreements
• Mark trade secrets as “Confidential” in documents
• Keep these documents protected
• Only allow those who need to know to see the information
• Update company policies and employee handbooks to reflect proper handling of company property and information
• Keep every communication in writing
• Remind employees of the signed Confidentiality Agreements

If an employee does leave with your company’s trade secrets, remember that hope is not lost; it may only turn out to be a minor setback. Stay calm and speak to your attorney.

For more information, send us a message.