Defending your business from a former employee turned competitor

On Behalf of | Jan 24, 2020 | Firm News | 0 comments

California has one of the biggest economies in the world which you may want to capitalize on by running a business. Unfortunately, the more successful your company becomes, the more likely it is for other people to try to copy your business’ model or steal from it in the hope of piggybacking off of your success.

In many states, businesses require the prompt execution of a non-compete agreement as part of their employment contract. Although national companies and even California-based businesses may include these documents in their employment contracts, California does not enforce non-compete agreements. Therefore, your business needs to take special steps to protect itself from unscrupulous former or current employees who want to steal your trade secrets for personal benefit.

Non-disclosure agreements can offer your company protection

One of the biggest risks your staff creates is the risk of someone stealing your proprietary information and using it for their own benefits or selling it to your competitors. From a list of clients to chemical formulas or other critical secrets, information that allows you to offer something unique or better than the products and services your competitors have available can make all the difference for your business’s long-term success.

When an employee takes that information for personal gain, they can do massive amounts of damage to your business. Non-disclosure agreements, also called confidentiality agreements, can legally bind your employees from revealing proprietary information that they learn or have access to as part of their role in your company. Including them in your employment contracts for new hires and internal promotions can help you protect your company.

While you can’t stop someone from starting their own business in the same industry or working for your competitor, you can hold them accountable for disclosing, stealing or selling protected information and trade secrets. If you can prove that they violated the non-disclosure agreement, you can then take legal action against them for doing so.

Track who has access to what business information to limit defense options

Obviously, someone facing legal and financial repercussions for the theft of trade secrets or intellectual property from their former employer will try to deny responsibility.

If you hope to stop them from using those secrets or collect monetary damages for the impact of their theft on your business, you need to show the courts that the individual in question accessed trade secrets while working at your company. You will want to be able to connect that worker with the information and that information to their current employer or business.

The better you document and track who has access to what specific information and documentation within your company, the easier it will be to show that only a limited pool of individuals could possibly have accessed or leaked that information. For example, if only six people had access to your client list and five of them are still executives at your company, it is likely that the sixth person is the leak that caused hardship for your business.