Protecting Your Trade Secrets, Part I
Learn how to invest your IRA or 401k into a franchise penalty-free. ($50k min)
A departing employee may compromise trade secrets-formulas, patterns, devices or compilations of information used in your business which give you a competitive advantage.
Information as seemingly mundane as a customer list or pricing plan, or as complex as a biological invention or software program, may constitute a trade secret. To determine this, courts consider whether anyone outside your company knows the secret, which people in your company know it, what measures were taken to maintain secrecy, the value of the information, and how easily it could be legally acquired or duplicated.
Although the law requires employees to preserve their employer's trade secrets, a company may have confidential information that doesn't qualify for this protection. Thus, having new employees sign a nondisclosure or confidentiality agreement protecting all sensitive information is a wise precaution. Such an agreement can identify the information to be protected, impress upon the employee the seriousness of the obligation, and provide critical evidence if there's ever a dispute.
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