Implementing an Effective Trade Secrets/Confidential Information Protection Program

With the easy portability of information enabled by technology, it’s important for in-house counsel to implement a trade secrets/confidential business information protection program. Such a program will have two principal components: physical security and legal security. It must include measures taken during the employment relationship as well as the extremely important exit interview process.

In respect to physical security, restrict access to servers, routers, and individual databases to those whose jobs require it. Consider using an enterprise “vault” within the company’s email system to make automatic, non-deletable copies of all emails. Keep locations containing the company’s computer hardware and backup devices locked. Establish password protocols for all employees. Train employees on their confidentiality obligations, and establish consistent exit interview procedures.

In respect to legal security, requiring employees to sign a confidentiality agreement is an essential element of an effective trade secrets protection program. It should define a company’s trade secrets, as distinguished from business confidential information. It should prohibit unauthorized use or disclosure of trade secrets and confidential information, but not restrain or prohibit employees from seeking alternate employment or competing. It should also contain a severability provision, which allows a court to sever independent clauses that are found to be unenforceable while leaving the rest of the agreement intact.

Companies should conduct a once a year review of changes in their jurisdictions’ laws and be willing to amend their agreements when changes in the law require it.