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Are You Prepared for the Trade Secret Litigation Boom?

It seems everything in the world right now somehow revolves around COVID-19. Stay-at-home orders; the debate over students returning to the classroom; “essential” versus “non-essential” workers; college and professional sports; and the list goes on. In the legal world, one coming boom caused by the pandemic should not be overlooked: trade secret litigation.

Consider how much of the workforce is working remotely. Recent statistics show that in the past few months alone, even after many businesses have begun reopening, 70% of the workforce reported working remotely at least one day a week, and 59% reported working remotely more than half of the week. Some businesses have planned for their workforce to work remotely through the end of year and beyond, even permanently.

What does this mean in terms of trade secret protection for employers? Just think of all information that has been shared electronically as a result of the new “work from home” normal. How many shared drives have been accessed remotely? How many documents have been sent to and downloaded in home offices? How many employees have accessed their employer’s data using a shared home or personal device? And in some instances, the uncertainty caused during the initial days of the pandemic caused companies to roll out programs and grant access to their information under rushed conditions, with concerns for privacy taking a backseat to the urgency of ensuring continuity of operations using a remote workforce.

As if that is not enough reason for concern regarding the protection of trade secrets, consider also how many remote workers had access to trade secrets but have since been laid off or furloughed? What precautions, if any, were taken to ensure trade secrets and confidential information were guarded from theft by these former and furloughed employees? If a laid off employee had access to their employer’s competitive information, what will prevent them from opening their own business and competing directly with their former employer, using its methods and client information?

To the extent they have not already done so, employers should immediately:

  • Ensure access to shared files is on a need-to-access basis only;

  • Limit access to client information to only those clients whom a particular employee services;

  • Limit access to research and development information to only those individuals in research and development who are working on the particular project;

  • Republish policies forbidding use of personal email accounts for business purposes;

  • Implement safeguards for the electronic mailing and sharing of confidential documents;

  • Have employees acknowledge/reaffirm their understanding that company competitive information is owned by the company and only certain people are allowed access;

  • Ensure computer systems are only accessed through private, reliable and secure WiFi networks.

A trade secret litigation boom is coming – are you ready?

© Polsinelli PC, Polsinelli LLP in CaliforniaNational Law Review, Volume X, Number 231
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About this Author

Shareholder/ Practice Chair

As Chair of the firm's Restrictive Covenants & Trade Secrets practice, Eric Packel is a trial lawyer who represents local and national businesses in complex employment litigation, particularly claims brought under the Uniform Trade Secrets Act, and a variety of employee and shareholder related claims. For many of these clients, Eric also oversees and directs their general legal needs and consults them in their overall business strategies. Over the course of 20 years, Eric has tried cases to juries in five states, including:

  • Violations...
816- 360- 4249
Emma R. Schuering, Polsinelli PC, FMLA Matters Attorney, labor and employment lawyer, kansas city
Associate

For each engagement in which Emma Schuering is involved, she seeks to provide concise and articulate legal counsel that aligns with clients’ business objectives. Emma represents employers in a variety of employment litigation matters, including the enforcement of non-compete agreements and FMLA claims. She also focuses her practice on appeals and dispositive motions.

Prior to joining Polsinelli, Emma worked as a law clerk at the Missouri Court of Appeals, Southern District, in Springfield, Missouri. During her tenure, Emma was exposed to number...

816.360.4281
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