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2021 Business Resolutions

Annual Best Practices for Protecting Your Company’s Confidential Information

1.     Update agreements with employees, consultants, vendors, suppliers. Most misappropriation and wrongful disclosure incidents arise from the actions of employees, contractors, and strategic partners. You can mitigate this threat by creating enforceable non-disclosure and restrictive covenant agreements that deter misappropriation or disclosure by setting clear rules and imposing harsh consequences for a breach. Ensure that the states in which you operate allow the restrictions in which you seek to enforce.  (Note that CA, ND and OK (and shortly, D.C.) do not allow employee non-compete agreements.)

2.     Update internal policies. Create or revise policies that clearly express baseline rules and expectations.  They should be written in plain English, identify actions required/prohibited, and include straightforward rules and procedures for the proper use, disclosure, and return of confidential information and trade secrets.

3.     Conduct training for your workforce. Even the best agreements or policies are of limited value if employees and business partners don’t understand them or, worse, don’t know they exist.  Training is a very effective way of emphasizing the significance of protecting proprietary  information, establishing a culture of compliance, and confirming that employees, vendors and business partners are aware of their obligations. Training can be done in person, when appropriate, or remotely, either with live trainers via videoconference or pre-recorded training segments.

4.     Improve work infrastructure and security measures. Remote work will be here through 2021 and is likely to maintain a prominent role in our economy for some time. As we start the new year, companies should reassess their technology and security infrastructure to account for remote work becoming a fixture, and, in the case offices reopen, to be able to adapt quickly to a fully remote workforce should the need arise again.

5.     Develop a way to enforce these measures and apply it consistently. Consistency in enforcement not only serves as warning to potential misappropriators, but it also will constitute “reasonable protective measures” which are crucial to establishing the existence of a trade secret in litigation.

6.     Create a best practices document for exits and investigations. Even as offices reopen, many employees may work remotely, at least part of the time.  It’s crucial that organizations, upon notice of employee resignation, are able to effectively conduct exit interviews and remind employees of continuing, post-termination obligations. This may include having an employee sign a short termination certification which re-acknowledges these obligations. Also critical is management’s ability to conduct remote investigations in the event that an employee may unfairly compete or where there is concern that a business partner or vendor has misappropriated trade secrets. Having a pre-developed playbook ensures quick, company-approved action to address threats of wrongful disclosure.

7.     Take stock. A new year is always a good excuse to take stock of trade secrets and other company owned intellectual property. Once identified, you can take measures to safeguard that asset through the above actions. Conduct a trade secret audit with the help of counsel so as to preserve attorney-client privilege.


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