Robinson Brog Leinwand Greene Genovese & Gluck, P.C. - New York City Business Litigation Attorneys

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Minding the Hen House: Protecting Business Secrets

by Ronald B. Goodman

Worsening economic times creates opportunities for rival companies to poach employees from a weakened competitor. Employers must aggressively protect trade secrets. Employees in worsening economic times may feel the need to switch companies to head off potential job loss. If an employee is subject to a non-compete or non-solicitation agreement, the employer may have adequate protection. But where there is no such agreements employers are at a high risk to have trade secrets and confidential information depart with a key employee.

What can an employer do?

  1. Keep a watchful eye or key indicators as to whether an employee is getting ready to leave.
  2. If an employee makes an unusual request to meet with clients, that may be sign that he is planning to leave with that client.
  3. Late night e-mail/system access. This may be a potential sign that an employee might be downloading sensitive databases or electronic information.
  4. A unusual request for confidential information.

What steps can an employer take?

  1. Limit access to highly sensitive material.
  2. Set up computer system to prevent flash drive use.
  3. Use confidentiality agreements and restrictive covenants.
  4. If an employee resigns, immediately cut off access to emails and computer systems. Conduct a comprehensive exit interview with the employee as soon as possible. During such interview remind the employee of any post-employment covenants. Demand that all information be returned, as well as Blackberrys and other employer-owned devices.
  5. If you discover a violation, resist self help among in-house people, review the employee's computer, it may not be knowledgeable and forensically sound methods.
  6. If an employee leaves, preserve his or her computer and all other employer issue devices such as cell phones, PDAs, flash drives, etc. You should save all emails which may contain damaging admissions.

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