Employees leave your business all the time, some on good terms, some on not-so-good terms. But one thing is almost always certain in either situation: many will leave with your valuable corporate information. Trade secrets, customer lists, or your business’ processes and methods that have been devised and honed throughout the years of trial and (costly) error.
Worse, many of the things and information that those departing employees have can be used against you, should they fall into the hands of your competitors or should the employee opt to go into business on her or her own.
There are ways you can mitigate that risk, and limit what a soon-to-be former employee takes and doesn’t take with them. Read on as our Chicago business litigation lawyer at Ellis Legal exmplains more.
Covenants not to Compete
A non-compete agreement is probably the first thing that comes to mind. But you may be surprised to learn that a noncompete doesn’t go very far in protecting your private, trade secret information.
The non-compete agreement is just going to limit or prohibit where a former employee works. It limits the employee him or herself—it doesn’t necessarily, by itself, limit the dissemination of your business’ private information (which can be done even if the former employee never works anywhere else again). An employee could theoretically abide by the noncompete, but still sell or distribute your private information to others.
Trade Secrets
A more comprehensive solution is to have prospective employees sign an agreement that information they are privy to during employment, is a trade secret of the business, and that it won’t be kept, used, or disseminated.
You’ll need to identify what is and what isn’t a trade secret, and simply calling something a trade secret doesn’t make it so—but certainly having any kind of trade secret agreement, whereby the employee agrees that he will not keep, disseminate, utilize or distribute your trade secrets, is better than having nothing at all.
General Confidentiality Agreements
Why would you need an overall confidentiality agreement? Because often, there are things that you want to keep confidential or private, which may not otherwise qualify as legitimate “trade secrets” under the law.
You do have a right to ask or require that employees keep any information confidential and private, even routine things.
A confidentiality agreement also encompasses what the (former) employee says. It can ensure that the employee isn’t saying things about the company that you don’t want shared—even if that information by itself doesn’t have a lot of commercial value to competitors.
Return of Property
And you also have a right to include provisions in any of these agreements, that any property of your business, be returned to you, or destroyed, at the end of the employee’s employment with the company. Something doesn’t have to be top secret, to be considered your property, that you are entitled to have returned.
Speak with a Chicago business litigation attorney at Ellis Legal at (312) 967-7629 to see how to best protect your company’s vital and private corporate information.