How to Protect Your Company’s Trade Secrets From Employee Theft
If you were to ask a group of employers about possible exposures, most would likely tell you that their risks come from the outside. Not many would admit or even think to admit that there is a likelihood danger lurks within. Yet, employee theft is a huge and growing concern for American businesses, costing an average of $1.13 million each year per business. That sum doubles when theft goes on for five years, and more than quadruples when allowed to persist for 10 years. While embezzlement and check fraud account for the majority of employee theft cases, theft of trade secrets is also a major concern.
Your trade secrets are your bread and butter, as they are what makes your business unique. For this reason, you need to be proactive in the protection of them and ensure that, should a secret leak, you have the necessary measures in place to pursue swift and aggressive legal action. Our Birmingham employment attorneys can help you devise a strategy that will keep your trade secrets secure and your rights intact.
Though nondisclosure agreements are not necessary to protect your trade secrets, they can be useful to define the scope of trade secrets and prevent any confusion as to what information is confidential. Also, when asked to sign an NDA, most employees are more careful about what information they do and do not reveal. Finally, an NDA can protect your rights to information that may otherwise not be considered a trade secret under federal or state law. For these reasons, you should have employees, vendors, contractors, partners, and any other party privy to confidential information sign a nondisclosure agreement.
Incorporate a Confidentiality Policy in Your Employee Handbook
Another great way to protect your private information is to include a section regarding how employees are to handle trade secrets and other confidential information in your employee handbook. For example, you can prohibit employees from taking confidential documents home or from emailing them outside of the company’s network. You can also prevent the use of personal email while in the office and limit cell phone use to designated areas, such as break rooms or areas where files cannot easily be accessed.
Have Employees Sign Non-Compete Agreements
Though the section of Alabama Labor Code dealing with non-competes was significantly altered in favor of employees in 2015 to void “[e]very contract by which anyone is restrained from exercising a lawful profession, trade, or business of any kind,” the new section, Section 8-1-1, provides exceptions for contracts that serve a protectable interest. Trade secrets fall under the category of a “protectable interest.” If an employee does come into access with trade secrets, and if he or she leaves the company for any reason, you can rest easy in the knowledge that he or she is not legally allowed to divulge confidential company information. If he or she does, he or she is subject to punishments and damages set forth by the law.
Discuss Your Options With an Alabama Business Lawyer
While there are other measures you can take to prevent the theft of trade secrets, including limiting access to proprietary information and collecting confidential documents upon termination, the aforementioned methods may prove to be the most effective. That said, to ensure that your NDAs, policies, and non-competes are valid, enforceable, and without loopholes, retain the guidance of a knowledgeable lawyer. Our Alabama team at Cloud Willis & Ellis can help you devise documents that leave little room for interpretation or confusion. Contact our team today to begin doing what is necessary to protect your business’s interests.