What Steps Do You Need to Take?
The considerations of employment law can range from how to best hire team members to managing them on a daily basis. For many employers, contracts play an vital role in ensuring everyone understands the employment agreement and is protected. That is certainly true when it comes to protecting your trade secrets and letting employees know what you expect of them in this regard.
What Is a Trade Secret?
A trade secret is any information that a business or business owner has attempted to keep secret and that creates economic value for the business by not being known. A well-known example of a trade secret is the recipe or formula for Coca-Cola. If that recipe were leaked, anyone could theoretically start making the beverage, which would impact sales and revenues for the brand.
Trade secrets might be recipes, steps in a process, computer code, or other distinct types of information.
Businesses having trade secrets typically consider them very valuable and work to protect them. For example, among companies that perform research and development work, around 75% say that protecting trade secrets is somewhat or very important.
Georgia Criminal Law Regarding Trade Secrets
The law agrees with businesses that it is important that they can protect such secrets. In fact, Georgia criminal law makes theft of or certain exposures of trade secrets a crime. Individuals who are convicted of such crimes can face one to five years in prison and a fine of up to $50,000.
Civil Options When Trade Secrets Are Exposed
Employers also have civil options they can pursue when trade secrets are exposed by their employees. Typically, the exact nature of these options depends on the contracts you have with those employees. You might be able to seek civil remedies via a lawsuit, for example.
Steps You Can Take Now to Protect Your Trade Secrets
Of course, most employers would rather protect their trade secrets in the first place than fight for damages and try to recover from losses if they are exposed. There are several steps you can take to reduce the likelihood that your trade secrets might be put at risk by your team members.
Create Nondisclosure and Confidentiality Agreements
Start by creating strong contracts that require your workers to hold certain information confidential. You can include these agreements in regular employment and/or independent contractor agreements. You may not need every worker to sign such agreements. Work with human resource and legal professionals to understand where your exposure is and who should sign a non-disclosure agreement (NDA) or confidentiality agreement.
Hire the Right People
Take time in your hiring processes to vet people for cultural and job fit. People who are satisfied with their work and job are less likely to purposefully leak information to try to harm the company. You may also want to talk to your recruiting and HR teams or partners about ways to assess whether job candidates are honest and trustworthy. When you hire trustworthy people, you may have more peace of mind about your trade secrets.
Define Your Trade Secrets
A lot of information should be held confidential regarding a business and how it runs. For example, you may not want employees telling customers all about internal costs, and you certainly do not want staff members sharing your client lists with competitors. However, neither of these things would be considered trade secrets—confidentiality alone does not make a trade secret.
Make sure you spell out exactly what information is considered a trade secret. Do so in your written policies and talk to a business attorney about how much detail should go into NDAs or other similar confidentiality contracts you have employees sign.
Provide Regular Training
Provide training for employees regularly to help them understand what type of information falls under the trade secret designation and how to protect it. Include hypothetical scenarios that help employees understand what might be considered a breach of confidentiality in general and what sharing or exposing trade secrets might look like.
Do not assume that everyone who might expose your trade secrets would do so maliciously. Many company information and data breaches—of all types—actually happen by accident because an employee was careless or did not understand a specific policy.
Use Need-to-Know Structures
The story on the Coca-Cola formula is that only two employees at any given time know the entire formula. That is in a company with more than 80,000 employees. There is, supposedly, even a succession policy for choosing the next formula-keeper if one of those two individuals passes away.
While you might not be that extreme about protecting your trade secrets, the takeaway here is that not every person who works for you needs to know all the information. Create policies that ensure people know what they need to do their jobs but do not have access to all of your trade secrets unless absolutely necessary. This helps reduce the damage if some information is compromised.
Work With Business Law Attorneys
Work with a business law team to evaluate your risks of exposure and protect your trade secrets via strong contracts. The team at InPrime Legal offers contract services and other business legal services to help you manage your business and your team when it comes to legal matters. To find out more about our services, give InPrime Legal a call at 770-282-8967.