There is more than paperwork and finding a replacement when an employee leaves your company. Employees access and utilize a lot of information while working for you; information that can be devastating if it falls into the hands of a competitor.
Therefore, you need to take proactive steps to ensure that your information is kept confidential, even after the employee departs.
“A thorough exit interview will help ensure that all your proprietary data and information is accounted for,” says James J. Boutrous II, a member at McDonald Hopkins LLC, and co-chair of the Trade Secret, Non-Compete and Unfair Competition Practice Group. “It also shows that you will be vigilant in protecting the company and its intellectual property.”
Smart Business spoke with Boutrous about how to keep your trade secrets and confidential information guarded and protected.
How can you protect your business information and valued relationships?
Protecting your proprietary information when an employee departs requires attention to detail at the beginning and end of the employment relationship. A reasonably tailored noncompetition agreement can provide substantial protection by limiting a departing employee’s ability to make competitive use of information gathered during employment. You can also use patents, trademarks, copyrights, bilateral contracts and statutory trade secret law to protect your trade secrets and customer relationships.
Well-drafted covenants and proper internal measures can protect you on the front end, while employee exit interviews to assess any potential risks can protect you on the back end. You also need to be prepared to move swiftly and decisively when violations of the restrictive covenant, the Uniform Trade Secret Act, or both are discovered.
How can you secure your company’s assets?
Review your business to determine the assets that need to be protected. Identify the protected business interests that each employee is exposed to and utilizes in his or her position. These include client/customer relationships, supplier relationships, employees, bidding information, pricing and margin information, strategic plans, and prospective business opportunities, among others.
You need to draft restrictive agreements tailored for each level of employee. These can be less restrictive (confidentiality agreements) to the most restrictive (global noncompete agreements) depending upon the level of employee and his or her access to your confidential business data.
You need to enforce restrictive agreements by consistently addressing violations. Failure to take immediate action can affect any current issues and future enforcement actions. Move swiftly, aggressively and with a fine-tuned strategy that incorporates your needs, governing law and local state nuances.