May 9, 2021

Volume XI, Number 129

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May 07, 2021

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May 06, 2021

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Workplace Confidential: Preventing Former Employees from Using Your Trade Secrets

Most trade secret cases involve allegations that a former employee is using a company’s confidential information at a new job or their own business. Given that reality, and the workforce disruptions caused by the coronavirus pandemic, it’s vital for companies to safeguard their trade secrets before and after employees leave.

Reasonable protective measures, such as clearly labeling trade secrets, training employees on confidentiality policies, and limiting access to secret information, are important to support future trade secret misappropriation claims. These defensive actions can be applied to all types of trade secrets — including customer lists, pricing information, source code, business strategies, and manufacturing processes —  but doing nothing exposes a company to arguments that unprotected information was not truly a trade secret. Another key protective step is having employees with critical knowledge sign non-compete agreements, as a condition of employment or for receiving severance pay, in order to keep them from working for a rival or starting a competing business, usually for a year or two.

If a company discovers that an ex-employee is using its confidential information in a new place of work, it can file state and federal litigation at the same time under a 2016 federal law known as the Defend Trade Secrets Act (DTSA). Both options allow companies to seek a court order to stop the unlawful activity and potentially receive damages. Depending on the law of the state in which a federal court sits, a company alleging trade secret misappropriation may be able to utilize the “inevitable disclosure” doctrine and argue that the former worker would be unable to perform the new job without relying on trade secrets learned in the prior position.

Combining a proactive approach to shielding trade secrets with the strategic use of litigation when they are misappropriated enables companies to defend their most vital confidential information.

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©1994-2021 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume X, Number 237
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About this Author

Adam Samansky IP Attorney Mintz Law Firm
Member

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...

617-348-1819
Nicholas W. Armington, mintz levin law firm, patent, IP, litigation attorney
Associate

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...

1.617.348.4451
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