Trade Secrets and the COVID-19 workplace

By: Christopher Cole | February 5, 2021

In the course of the pandemic, nearly every business – mine included – made changes to the manner in which they ordinarily conducted business, to meet the challenges of these extraordinary times. The principal challenge of 2020 may have been adapting to a workplace that no longer centered on an office headquarters, allowing all employees to work from home and making sure that each employee had the home-infrastructure in place to quickly adapt and contribute. Once the home office was set up, employers continued to drive employees to deliver opportunities, sales, results, and advice.

It should be no surprise, then, that over the past 10 months, I have received more emails and texts than ever before from existing clients and their employees from personal email addresses and personal cell phones, sometimes attaching sensitive correspondence and analyses for me to review. My job is first to be responsive to the issues posed by these communications. But it is worth mentioning that many of these communications may contravene best practices for maintaining the confidentiality and secrecy of important business matters and company policies concerning the protection of employer property and know-how.

As we head, in theory anyway, to widespread vaccination and back to some sort of new normal, employers should be reminded that business information is often valuable because it is secret, and it is secret and protectable only when the employer uses reasonable efforts to preserve its confidentiality. Almost every business relies on trade secrets, which, if properly preserved, can be protected in the courts should an employee depart with them.

Trade secrets are such things as a carefully curated customer list, pricing and margin information, a recipe, strategic plans for products and product replacement. State and federal trade secret laws define a trade secret as something that derives independent economic value from not being generally known to the public or readily ascertainable by legitimate means, and which is “the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” To pursue the return of a trade secret from a departing employee, the employer will have to show proof that it used reasonable steps to protect that information. This includes, at a minimum, the imposition of a reasonable non-disclosure agreement with every employee handling sensitive information.

For the pandemic era at-home workforce, employers should take certain minimum steps to reinforce obligations of confidentiality. Here is a top five:

Message employees that, even though the environment has changed, they are handling company information and property and must act with care.

Limit (or continue to limit) access to company information and trade secrets to employees who really need it to do their jobs. Use and update passwords and password protections to access company networks, and limit access to specific networks and segments to “need to know” personnel, with authentication for every log-in to the network or segment.

Mandate that employees working at home have certain basic security in place, such as password protected WiFi, employer-approved anti-virus and anti-malware software. Employers should require that employees change the default passwords on their home routers, and use different passwords for home systems and data than they do for work-related access.

Use encryption for particularly sensitive information that is sent to groups and customers and prospects, signaling to the users and recipients that they are sending and receiving sensitive information.

Address exit practices realistically. If an employee leaves during the pandemic, employers must evaluate the departing employee’s recent work, recent access, and download activity. The traditional exit interview and the return of company information and property may be complicated by the fact that the “office” is in someone’s home.

Once the country moves beyond the pandemic, employees will again begin to move, looking for different and “better” jobs. Employers will need to be ready to ensure that valuable company property and information does not go with them.

This article was originally published in the Portsmouth Herald and can be found here.