Resources

Safeguarding Your Business’s Trade Secrets

June 7, 2016 Posted in Industry News

The value of a trade secret is in its confidentiality. To meet the definition of trade secret, the data, methods, processes, formulae, ingredients, programs, client lists or other information must not be known or knowable by others. By establishing effective safeguards, you not only protect the trade secret itself, but also preserve your rights to relief under intellectual property laws.

Limit Access to Trade Secrets

Not all employees need access to all information in your company; how much access should depend upon need and level of responsibility. Determine who is allowed access and provide only them with the appropriate IT credentials, passwords and physical keys. Then, make these items traceable and the employees accountable for unauthorized infiltration of the system.

Computer Security

Technology has created a more productive workplace. Employees can access documents from a common company server, share information to laptops and smartphones, and blast out messages to the entire company in one email. Along with improved efficiency, technology creates substantial risks that an employee may accidently disclose confidential information or purposely retrieve off-limit information. IT security is thus an integral aspect of effective trade secret best practices.

A surprising number of businesses don’t adequately protect passwords. Some employees even post their passwords directly on their computers on sticky notes. Under no circumstances should employees be allowed to display passwords or keep them inside their desk drawers. In addition, periodically locking computer access forces employees to change their passwords frequently.

IT security policies should also address use of employees’ personal devices for work-related matters. Clear parameters should be set as to how and when, if ever, an employee can access or store information offsite.

Policies regarding company-wide emails can minimize risk of the dreaded mass email mistake. With the variety of document sharing capabilities available, emailing sensitive information to large groups might not be necessary or wise.

Confidentiality Agreements in California

Companies throughout the United States use non-compete agreements to keep employees from using their training and knowledge to benefit their former employer’s competitors. These non-compete clauses are illegal in California. Workers have the right to transfer jobs at-will and to take their valuable skills and experience with them. However, workers do not have the right to disclose trade secrets. Furthermore, your company has the right to contractually bind employees in a nondisclosure agreement.

Nondisclosure clauses should cover employees at every level. Having junior level workers sign a page in the employee handbook might suffice, but senior level executives should sign more comprehensive contracts that reflect their greater access to valuable trade secrets.

Make safeguarding your trade secrets a priority. Once the information is released, you can’t make it secret again.