Originally Published MX January/February
2003
The Case of Business Secrecy v. Job Mobility
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In the tug of war between business secrecy and job mobility—pulling toward greater security in one case and maximum freedom in the other—employers and employees each should take steps to protect themselves.
Get It in Writing. Both employer and employee should put everything in writing. For employers this means having written confidentiality agreements with all employees who come into contact with business secrets, including bookkeepers and shipping clerks as well as high-ranking executives. Employers should also identify key employees for whom a noncompetition agreement would be appropriate, and should consult with experienced legal counsel in drafting and negotiating such agreements.
Employees must know what their employment obligations are. Prospective job takers should read their employment agreements and ask questions. If necessary, they should consult their own attorneys before signing a noncompetition agreement. They should ask for modifications when warranted. A candidate for employment who cannot live with the employer’s terms should decline the job offer.
Understand the Law. Employers must know the applicable law. The law covering noncompetition and confidentiality agreements varies by state. It is a mistake to think that an employment agreement that applies at company headquarters will necessarily comport with the law in another state where branch operations are located. Recourse to counsel is advised here, as well.
Remember the Arrangement. It is incumbent on both employer and employee to keep the agreements they have made fresh in mind. Employers should periodically remind employees of their confidentiality obligations. Supplying practical examples can be helpful in making clear to staff what the company deems a business secret, as can written materials. Employers should also conduct employment termination interviews in which the departing employee is reminded of the ongoing duty to keep privileged business information secret. The departing employee should be required to attest that all confidential information in recorded form has been returned to the employer.
For employees, it is best to depart the job on the same terms as employment began. In other words, they should not keep any of their former employer’s documents. This includes purging their laptop and, if they worked at home, their home computer as well. They should also avoid discussing the former employer’s business with former colleagues with whom they still associate. And, of course, they should not discuss with their new employer secrets pertaining to their former company.
Protect Secrets. Employers must take reasonable steps to keep their proprietary information confidential. They should restrict access to sensitive information to only those employees with a need to know. Establishing written confidentiality agreements with outside vendors, consultants, and customers where appropriate can be a good idea. The same degree of caution should be exercised with temporary employees as with permanent staff.
Treat the Principle as Universal Law. New hires must be cautioned—preferably in writing—not to divulge any business secrets of their former employers. In addition, it may be best to have particularly high ranking or especially skilled new employees state in writing that they will not use any of the confidential information learned from their former employment in the performance of their new job.
Copyright ©2003 MX
