Author: Jimmy Byars
May 31, 2017
In today’s highly-competitive business climate, an employer’s “information assets,” including the company’s confidential, proprietary, and “trade secret” information related to the company’s business and disclosed to trusted employees, are often among the employer’s most valuable resources. But the increasing mobility of employees within the labor market, coupled with the ease with which electronic information can be transferred to the wrong hands, make it critically important that employers take proactive steps to ensure their information is protected from departing employees and competitors.
On Wednesday, June 14, 2017, our group will present the third webinar in this year’s Employment Law Certificate Series, titled “Strategies for Trade Secret Protection and Litigation.” This presentation is designed to help employers address two common questions related to information security: (1) what steps can employers take to minimize the risk that employees misappropriate their confidential, proprietary and trade secret information, both during and after employment; and (2) if an actual or potential misappropriation is discovered, what steps can employers take to minimize the damage?
To address these questions, our webinar will cover the following topics:
Drafting and implementing enforceable confidentiality, non-solicitation, and non-compete agreements.
These types of “restrictive covenants” are generally helpful to provide employers with a contractual remedy against employees’ misappropriation of information assets and other means of unfair competition after employment ends. But restrictive covenants are subject to very specific requirements, and must be carefully drafted and narrowly-tailored to the employer’s “legitimate business interests” in order to be enforceable. We will address some of the common missteps in the drafting and implementation of restrictive covenants and related ways to increase the likelihood that they will be effective if a misappropriation or other competitive violation is discovered.
State and federal statutory protections.
In addition to the contractual remedies provided by restrictive covenants, North and South Carolina have both adopted versions of the Uniform Trade Secrets Act, and, last year, Congress passed the federal Defend Trade Secrets Act of 2016. These statutes provide employers with critical rights and remedies related to the misappropriation of “trade secrets,” but they also impose strict requirements on the types of information protected as “trade secrets” and the measures employers must take to protect that information in order to seek the protection of those statutes. We will discuss these statutory protections and what their requirements mean for employers.
Electronic and physical data security measures and employment policies.
The various trade secrets statutes require that the information at issue be subject to “reasonable measures” to maintain the secrecy of trade secret information. In many cases, employment policies related to the identification, treatment, and preservation of trade secret information are among the most important evidence that employers can present to demonstrate that they have met those obligations and are entitled to all related statutory protections. These measures and related policies also provide employers with an important means of identifying their expectations to employees and holding employees accountable for breaches in data security protocols.
Role of IT staff in data preservation.
For those employers whose information assets are generally maintained in electronic form, including through email, company intranets, or other company electronic databases, IT staff play a critical role in ensuring that those assets are protected. We will address some of the measures and related directives that can be provided to IT staff to ensure that appropriate data safeguards are in place and to increase the likelihood that a misappropriation will be promptly discovered.
Onboarding and separation of employees with access to information assets.
Many of the most critical data security measures occur—or do not occur—when employees are hired and when they leave the company. We will address the steps employers can take in the onboarding and separation phases of employment to both identify new employees’ obligations and expectations with respect to information security and to document that those obligations have been met for departing employees.
Handling suspected misappropriation issues.
When a misappropriation or threatened misappropriation is discovered, employers must act quickly to assert their rights in order maximize their potential remedies; moving too slowly can limit if not eliminate some of the remedies that may otherwise be available. We will address the most pressing action items for employers confronted with a misappropriation concern, including potential pre-litigation efforts to promptly rectify the issue as well as related litigation considerations if it appears that litigation will be necessary to put an end to the misappropriation.