Employee Departures and Trade Secrets

In a survey of 950 former employees, 60 percent admitted to taking confidential information from their former employers. 

Most of the data takers (53 percent) said they downloaded the information onto a CD or DVD, while 42 percent put it on a USB drive and 38 percent sent it as attachments via e-mail, according to the survey.

The survey also found that many companies seem to be lax in protecting against data theft during layoffs. Eighty-two percent of the respondents said their employers did not perform an audit or review of documents before the employee headed out the door and 24 percent said they still had access to the corporate network after leaving the building.

With layoffs taking place across the employment spectrum, employers must be vigilant in protecting their proprietary information from walking out the door with their former employees.  I’ve previously addressed what a trade secret is under Texas law, but just because something isn’t a trade secret doesn’t mean a former employee can take it with them.  So what can be done?  Here are a few suggestions:

1. Ensure that your employee manual or agreement contains defines what the proprietary information is and requires the departing employee to return it at the conclusion of their employment term.
2. Ensure there are appropriate safe-guards for proprietary information.  Is it password protected? Can you determine when employees have accessed databases or other company information?  If so, you can prevent or at least ascertain whether an "information dump" has taken place.
3. During exit interviews with the employee, have a candid conversation with them about their obligations under the aforementioned agreements and confirm they have returned all proprietary information.
4. Cut off the the departing employee’s access to the company network. 
5. Keep an eye on what former employees are doing.  Are they using company information with a new employer or new venture?