23 June 2015
How to Protect Trade Secrets and Confidential Information
The law defines a trade secret as something which is highly confidential, not generally known and by which a business can obtain an economic advantage over its competitors.
Not all of the confidential information owned by a business is a trade secret. Only information of the very highest value and confidentiality falls into that category. Examples might be secret trade processes or inventions, product formulae and particular client purchasing and pricing data.
The law gives good levels of protection to genuine trade secrets, whether there is a clause or policy in place or not. The problem is that, generally, the law doesn't adequately protect information that, whilst confidential and important, falls short of being a trade secret.
This means that most of the information which businesses want to protect has low levels of protection, unless the right clauses and policies are put in place.
There are a few different ways that you can ensure that your organisation’s trade secrets and information are kept confidential. The biggest risk you have as a business is your staff. Unfortunately, people have a tendency to talk about their work and what they do. This is okay unless what they’re talking about is confidential company information and shouldn’t be discussed outside of the office or work environment.
Ensuring Employees Don't Share Trade Secrets
The best way a business can protect against its employees sharing trade secrets and confidential information is to have the employees sign a non-disclosure agreement when they join the business in which they agree not to disclose any confidential information that they may learn whilst at work. It could also bind them to confidentiality after they leave your employ so they don’t go to a competitor and spill the beans.
It also provides a very important opportunity to define exactly what the company regards as being confidential information. It is important to remember that, without a clause like this, ordinary confidential information (that is, information not quite important enough to be counted as a trade secret) is not generally protected after the employee leaves your employment.
It is important to write a confidentiality policy for your business. This should lay out policies around data sharing, email and internet use, data protection, as well as keeping trade secrets secret. It is important that all staff learn about it and are 100% aware of the confidentiality of the work that they are doing.
You may wish to check employees’ knowledge of your confidentiality policies annually, just to ensure that they are up to date with any changes you have made and to reiterate the importance of keeping your business information private.
Ensuring confidentiality isn’t just about the staff talking about their work, but also documents, emails, files and other potential sources for leaks. If you leave an important file on a train or bus then the details are out there for the world to see. The transportation of business information outside of the workplace should be covered in your confidentiality policy.
Another issue which employers might consider is the extent to which they allow or even encourage their employees to collect confidential client data on personal social networking platforms like LinkedIn. If an employee leaves, he will still have access to his LinkedIn account, which may now contain highly confidential customer information or contact lists. Some businesses are reviewing the extent to which they encourage staff to use social networking for business development purposes, and also include the use of social networking in their confidentiality policies.
When an employee leaves the business, it’s important to conduct a proper exit interview to ensure that they know that the trade secrets they have learnt whilst with you are kept confidential. At this point, you can reiterate the non-disclosure contract that they signed, and remind them that they need to uphold it even once they’ve left.
Protecting trade secrets and confidential information can be hard, and drawing up contracts and policies can be a long and drawn out process. It can be made a lot easier by enlisting the services of a professional business employment lawyer who will also ensure you cover all the legal angles thoroughly.
For more information or to speak with a business employment solicitor, call Slater and Gordon Lawyers on freephone 0800 916 9060 or contact us online and we will call you.