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Protecting company information from departing employees

On Behalf of | Oct 11, 2021 | Business And Corporate Law

When an employee leaves a company, the employer might have serious concerns regarding the information the employee was privy to. It can be difficult to prevent the dissemination of information related to products, practices, and services. Two vital forms of information that companies should protect are:

  1. Confidential information: A company’s sensitive information can come in many forms, including client lists, business strategies/plans, purchasing information, legal information, and company directories.
  2. Proprietary information: Companies usually want to establish that anything their employees create is company property. Proprietary information also includes manufacturing processes, chemical formulations, trade secrets, and other intellectual property.

Legal protections for company information

A common way that important company information gets leaked is through employees who leave the company for competitors. There are a number of ways that a company can protect its intangible assets and hold former employees responsible for keeping trade secrets a secret:

  • Nondisclosure and confidentiality agreements: These agreements are more enforceable regarding the leak of confidential company information. Courts typically honor these agreements for an indefinite amount of time.
  • Separation agreement: A departing employee is typically given a payment in return for not disclosing company information to competitors. These agreements usually include nondisclosure provisions.
  • Non-competition agreement: These agreements are generally signed at the beginning of a person’s employment, as long as the company has adequate consideration, usually a payment or the promise of work.

Safeguarding your business information

It is a company owner’s right to maintain confidential practices that support healthy client relationships and competitive business practices. If you are a business owner/entrepreneur starting to expand your company, you’ll want an experienced business law attorney at your side to help draft the documents necessary to safeguard your business’s interests.