Steps to Take to Prevent IP Theft and
Protect Proprietary Workplace Information
By: Attorney Steven Rosenberg
Thanks to
the latest technology such as Smartphones and laptops, it has never been easier
for employees, whether intentionally or inadvertently, to walk away from their
workplace with valuable, confidential information. And if this proprietary information gets into
the wrong hands, the results can be devastating to a business’s success and
survival in a competitive marketplace.
Marital issues, money shortages and a need to "get ahead" are some of the reasons employees say they stole money or valuable information from an employer, according to one recent survey.
A company’s
proprietary, confidential information may be something as simple as a client
list, or as complex as patented technology.
Whatever it is, however, it is valuable information, vital to a
company’s success, and needs to be protected against the actions (nefarious or
otherwise), of unauthorized third parties.
What steps
should your business take to insure that its most valuable secrets and assets remain
its assets? First and foremost, you
should include a Confidentiality or Non-Disclosure Agreement as part of the
standard Employment Contracts that all new employees are required to sign. While the existence of such signed agreements
cannot guarantee that an employee still won’t walk away with the protected
information, it will, if drafted properly, at least provide your business with
legal recourse against such wrongful acts by an employee.
There are
many factors to be considered when drafting a Non-Disclosure or Confidentiality
Agreement, as it is important for each agreement to be tailored to fit the
specific needs of the individual business.
For example, do your employees have access to confidential information
such as working conditions and pay rates?
Do your employees have access to your customer database? Are they privy to your company’s trade
secrets, and/or new ideas coming down the pipeline? Most importantly, are your employees aware,
and is it clear to them, exactly what information is company
“property”, and is proprietary in nature?
Also
important to consider is whether your Agreement should incorporate a Non-Use
provision in its employment contracts, as well as a Non-Disclosure
provision. A non-disclosure provision
prevents an employee from disclosing the protected information to unauthorized
third parties; while a non-use provision prevents the employee from using the
information for anything other than the specified purpose, which is usually limited
to his or her job related responsibilities.
Whatever
your company’s policies are with regard to confidential information, it is
essential for the business to spell out specifically what information is
considered confidential and as such, protected. At the same time, when incorporating
Confidentiality and Non-Disclosure Agreements into Employment Contracts, a
business must make sure that the terms of any such agreements have not been
drafted so broadly that they restrict employees’ rights to free speech. For example, the Confidentiality clause that
was included in the Employee Handbook of one of the nation’s largest wireless companies was found to be too broad because it prohibited the company’s employees from discussing basic work conditions and pay rates among themselves!
Even if your
business has been operating with a Confidentiality or Non-Disclosure Agreement
in place, or has incorporated such relevant language into its Employee
Handbook, you still may not be fully protected.
Statutes, regulations and trends in case law are in a constant state of
flux. Language that may have been
sufficient to protect your business and its assets several years ago, may no
longer be effective. It is advisable,
therefore, to review your company’s confidentiality and non-disclosure/non-use
policies every few years, to insure that they remain in compliance with current
law.
The attorneys at South Shore Law have been advising businesses and organizations of all sizes for more than thirty (30) years on how to best protect and insulate their businesses through the use of Confidentiality and Non-Disclosure Agreements in their Employment Contracts. We would be happy to answer all of your questions on this subject or any other business related legal question. Contact us at South Shore Law and we can help protect your business interests. If you know a business owner or manager who may benefit from this information, please pass this along.
The information provided in this website and accompanying materials are all presented for informational purposes only and is not meant to be comprehensive legal guidance nor be interpreted as legal advice. Communications with South Shore Law, its lawyers and agents shall not be interpreted in such a manner as to form an attorney-client relationship. To begin exploring such a relationship, consult an experienced attorney at South Shore Law byfilling out the contact form or call us at 781-749-5600.
