October 25, 2020

Volume X, Number 299


October 23, 2020

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Rules of Engagement: Minimizing Trade Secret Disputes when Hiring Rival Employees

When companies consider bringing a new employee on board, the applicant’s prior experience is usually a significant factor in the decision-making process. If the prospective employee is coming from a rival company, ensuring that they’re not improperly disclosing trade secrets should also be part of the new-hire checklist to lessen the possibility of trade secret disputes and litigation.

As a preliminary measure, company leaders can curtail improper activity around trade secrets through the “tone at the top” by establishing a corporate culture that discourages managers from asking incoming workers to share their former employer’s confidential information. Companies can also explicitly communicate this expectation to potential employees during the hiring process and require the new hire to sign a statement that they won’t use their former employer’s trade secrets. In situations where the risks of improper use of the rival company’s confidential information are high due to the nature of the work, companies can monitor a new employee’s computer systems.

What should companies do if they’re on the other side of this equation? If there’s evidence that a former employee who jumped ship for a rival concern is trading on your organization’s secrets, putting the other company on notice may stop the improper activity. Notice can include anything from a phone call to a formal letter to filing a lawsuit, possibly including a request for a temporary restraining order or to seize the other company’s property for inspection.

Creating a culture that values and reinforces ethical business practices and promptly attending to breaches of trade secret confidentiality keeps trade secrets in-house when employees move on.

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume X, Number 254



About this Author

Adam Samansky IP Attorney Mintz Law Firm

Adam is an experienced IP litigator who primarily serves pharmaceutical, medical, high tech, and defense industry clients. He handles patent, trademark, and trade secret matters for innovators and investors. Adam has a strong record of success in multiparty, highly contested Hatch-Waxman litigation, in addition to other litigations involving advanced biochemistry, polymers, optics, manufacturing processes, and electronics. He has tried cases before multiple US district courts, briefed and argued cases before the US Court of Appeals for the Federal Circuit, and briefed bet-the-company...

Nicholas W. Armington, mintz levin law firm, patent, IP, litigation attorney

Nicholas is a litigator with experience representing clients in United States District Courts and the International Trade Commission, among other venues. Nicholas’ practice focuses on patent and trade secret litigation and he has litigated cases in a variety of technology areas, including network devices, semiconductors, converged devices, LED lighting, and manufacturing devices.

In 2018-2019, Nicholas served as a Special Assistant District Attorney in the Middlesex County District Attorney’s Office prosecuting criminal cases in the Framingham and Natick District Courts in Massachusetts. Prior to joining Mintz, Nick completed judicial internships for Hon. Ralph D. Gants, Chief Justice of the Massachusetts Supreme Judicial Court, and Hon. Patti B. Saris, Chief Judge of the US District Court, District of Massachusetts.