Quick Guide: How To Prevent Employees From Stealing Your Business’s Trade Secrets

Mark Bross of Bross Law, LLC advises clients on a variety of business issues. He shares his expertise on responding to governmental agencies, breach of contract and the protecting of a company’s trade secrets from employee theft.
 
 

 

mark bross2 Quick Guide: How To Prevent Employees From Stealing Your Businesss Trade Secrets

Mark Bross
(Photo courtesy of Mark Bross)

 

 

How should I respond when a government agency is investigating whether my workers are classified properly as independent contractors?

 
Whether a worker qualifies as an independent contractor is a complex determination that depends on a lot of different factors and the law that is at issue. A worker only qualifies as an independent contractor if she has her own business. The work being done is not integral to the client’s business and the client does not control when or how the worker performs the work. Most workers do not qualify, and so I help my clients figure out the best way to handle the government investigation, minimize potential penalties and fix the misclassification issue.

 

How should I respond when my customer or business partner has breached our contract?

 
Reviewing the contract at issue and understanding all of the facts surrounding the business relationship and the alleged breach of the contract is the first step. A well-drafted contract should have clauses specifying what each party is supposed to do under the contract, what constitutes a breach of contract, damages that will be received in the event of a breach and where a lawsuit should be brought in the event of a breach, whether in arbitration or a specific court.

 

How do I stop my employees from stealing my business’s trade secrets and starting up a competing business?

 
A business needs to take steps to make sure that the trade secret remains a trade secret and does not lose its value by becoming common knowledge. These steps include making sure that appropriate physical and administrative safeguards are put in place to protect the secret, which can include locked cabinets, separate locations, limited access, passwords, etc. As part of these protections, business owners need to have a properly drafted non-disclosure agreement (NDA) that is signed by everyone, employees and non-employees, who access the trade secret. The NDA prohibits the disclosure or use of the secret information, and if properly drafted, the client can seek to obtain monetary damages for any disclosure of the secret as well as an injunction that would prevent its disclosure. In addition to the NDA, business owners should also have all employees sign a properly drafted non-compete agreement, in which the employee agrees that he or she will not work for the client’s competitor within a specific region for a particular range of time. Non-compete agreements need to be drafted carefully as courts often refuse to enforce agreements that are over-broad and seek to do too much.
 
 

 
This article was written by Robin D. Everson of Examiner.com for CBS Small Business Pulse.
 

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