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Protecting trade secrets from departing employees

Mar 16, 2020 | Trade Secrets

One of the times a company’s sensitive information is particularly vulnerable to theft and loss is when an employee quits or gets fired. At this point, any sense of loyalty to the company that might have prevented a person from misusing proprietary information can vanish.

As such, employers and business owners must have appropriate measures in place to prevent departing employees from taking or having continued access to trade secrets.

Having, following standard departure procedures

As recommended by Human Resources groups like this one, employers can protect trade secrets by:

  • Having new employees sign confidentiality agreements if they have access to or knowledge of sensitive data
  • Reminding employees about that agreement upon the decision to terminate the employer/employee relationship
  • Conducting an exit interview with the employee
  • Ensuring all company-provided materials are returned
  • Terminating access to confidential documents
  • Tracking and monitoring any unusual activity such as data requests and external communications

Employers would be wise to take these steps with every departing employee to minimize the risk of loss of trade secrets.

When employee departures get hostile

In some cases, however, these steps are not effective at preventing misuse. For instance, if an employee quits or is fired in the heat of an argument or the wake of an unpleasant interaction, more immediate and aggressive measures can become necessary. Under these circumstances, employers might:

  • Escort an employee from the grounds on his or her last day
  • Confiscate files, computers and storage devices immediately
  • Review employee’s access to and use of sensitive data in the days and weeks leading up to his or her departure
  • Disregard any two-week notice or similar requirement and have the employee leave right away
  • Contact law enforcement if a departing employee makes any threats or engages in violence

It is rarely easy to lose an employee. It can be even more upsetting when there are concerns that a person will take and share or sell trade secrets. And while there are legal remedies available when a person misappropriates protected information, protecting the information in the first place is preferable.

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