5 Ways to Protect Trade Secrets During, After Pandemic

As we hopefully head toward widespread COVID-19 vaccinations and back to some sort of new normal, employers should remember business information is often valuable because it’s secret, and it’s secret and protectable only when you use reasonable efforts to preserve its confidentiality. Almost every business relies on trade secrets that, if properly preserved, can be protected in the courts if an employee tries to depart with them. Read on to learn five things you can do to keep the secrets more secure.

Trade Secrets More Vulnerable Away from Office

During the COVID-19 crisis, nearly every company (mine included) made changes to the manner in which they ordinarily conducted business. The principal challenge of 2020 may have been adapting to a workplace that no longer centered on an office headquarters.

The movement allowed many employees to work from home. Employers focused on making sure each individual employee had the home infrastructure in place to adapt and contribute. Once the home office was set up, they continued to drive employees to deliver opportunities, sales, results, and advice.

It should be no surprise, then, that over the past 10 months, I have received more messages and texts than ever before from existing clients and their employees via personal e-mail addresses and cell phones. They sometimes attached sensitive correspondence and analyses for me to review.

My first job has been to respond to the issues posed by the correspondence. But it’s worth noting many of the communications may have contravened the best practices for maintaining the confidentiality and secrecy of important business matters and company policies involving the protection of employer property and know-how.

Why Employers Should Care

Trade secrets can include a carefully curated customer list, pricing and margin information, a recipe, or strategic plans for products and product replacement. State and federal trade laws define a “trade secret” as something that derives independent economic value from not being generally known to the public or readily ascertainable by legitimate means and is “the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

To pursue the return of a trade secret from a departing employee, you’ll have to show proof you used reasonable steps to protect the information. At a minimum, that means you should probably require every employee handling sensitive information to sign a reasonable nondisclosure agreement.

Best Practices for Beefing Up Security

You should take certain minimum steps to reinforce the obligations of confidentiality with your pandemic-era, at-home workforce. Here are my top five tips:

• Message employees that, even though the environment has changed, they are handling company information and property and must act with care.
• Limit (or continue to limit) access to company information and trade secrets to employees who really need it to do their jobs. Use and update passwords and password protections to access company networks, and limit access to specific networks and segments to “need to know” personnel, with authentication for every log-in.
• Require employees working at home to have certain basic security in place, such as password-protected WiFi and employer-approved antivirus and antimalware software. You should require them change the default passwords on their home routers and use different passwords for home systems and data than they do for work-related access.
• Use encryption for particularly sensitive information you send to groups of customers and prospects, signaling to the users and recipients they’re receiving and sending valuable company information.
• Address exit practices realistically. If employees leave during the pandemic, you must evaluate their recent work, access, and download activity. The traditional exit interview and return of company information and property may be complicated by the fact the “office” is in someone’s home.

Bottom Line

Once the country gets past the pandemic, employees will begin to move again, looking for different and “better” jobs. You’ll need to be ready to ensure valuable company property and information doesn’t leave with them.

Christopher Cole is an attorney with Sheehan Phinney Bass & Green PA in Portsmouth, New Hampshire. You can reach him at ccole@sheehan.com.

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