BLOG

Protecting your intellectual property when employees quit

It can destroy a business

Two distinct threats

Previous OWDT blog posts have focused on Internet security strategies to protect your business from intellectual property theft. When proprietary information leaks out across some globally shared network, it can destroy a business. This growing challenge requires vigilant, agile security.

However, even if your Internet security were impenetrable (highly likely), you are still vulnerable to intellectual property theft from departing employees. When smart, knowledgeable employees walk out the door, they can share vital proprietary information about your products, business processes, strategies and clients with competitors.

Mitigate risk from departing employees by understanding the following–

    • Nurture a Culture of Respect (seek OWDT management strategy blogs).
    • Plan for the Eventual Departure of Your Most Valuable Employees

      Even the most carefully mentored employees in the best organizations will often leave when career-advancing opportunities arise. No one should be indispensable. Proactively encourage your most valuable employees to share their knowledge and expertise with their peers.

    • That Said, Create Incentives to Retain Your Key Employees

      Make sure key employees are well compensated, have abundant opportunities to innovate and are consistently recognized for accomplishments. By staying in close communication with each employee, you’ll be able to factor in individual motivators.

    • Clearly Communicate Your Security Expectations to Job Candidates

      Create a pre-employment interview agreement clearly defining what employees can and can’t disclose. Reinforce that message by emphasizing you also expect them to protect previous employers’ trade secrets. Give them a copy of the document.

    • Know the Legal Definition of “Trade Secrets”

      The law protects trade secrets, but not general employee knowledge or expertise gained under your employ. The good news is that any information, no matter how minute, shared by a former employee to a competitor that disadvantages you is generally legally protected.

    • Recognize the Advantages of Nondisclosure Agreements over Noncompete Agreements

      Employees are less likely to disclose confidential company information when they sign a nondisclosure agreement. Doing so also discourages new employers from trying to solicit such information from your previous employees. By comparison, noncompete agreements are unpopular with job candidates because they are more restrictive, e.g., often prohibiting workers from seeking employment with a competitor within a given time period or geographical area. In addition, they are harder and more costly to enforce legally.

    • Continually Remind Employees of the Risks of File Sharing on Their Personal Devices

      Many corporate security breaches can be traced to employees who carelessly share vital company information on their own devices; send it to the cloud, etc. To address this vulnerability, make sure your employees have clear guidelines for keeping their personal social media communication separate from business communication platforms. Tech control software like Mobile Device Management (MDM) provides only limited protection.

    • Thoroughly Investigate All Employee Security Breaches

      Keep track of employees’ digital footprints to guard against unusual behavior. For example, do you see a pattern of unauthorized access, excessive downloading or erasing of records? After reviewing their files to determine what may have been disclosed, make a copy of the employee’s hard drive if legally permitted. Before considering possible legal action, first determine where the information has gone.

    • Always Conduct an Exit Interview

      Be careful to communicate clearly the legal consequences of sharing protected information to departing employees. Those with no intention of breaching company confidentiality may still do so IF they somehow misunderstand what is entailed.

'Please return my book report after you grade my work. I like to retain all the rights to my intellectual property.'

More Insights