The Business Edge - Protecting Business Assets From Loss

Volume 10, Issue 1

Are Your Employees Sharing Company Secrets?

Whether an employee is on your staff for one year or 10 years, it is likely that he or she will learn a lot about your company. Customer lists, product and pricing information, and marketing plans are examples of the kinds of confidential information your employees may come into contact with on a daily basis. When an employee leaves your company, if the information is shared with a competitor, either intentionally or by mistake, it could have a devastating impact on your business.

Confidential information may sometimes be leaked because a company's confidentiality policy is unclear. To reduce the chances that employees will divulge confidential information, it is up to you to take appropriate precautions. Here are some suggestions for safeguarding your company's secrets:

  • Require all new employees to sign confidentiality/nondisclosure agreements that make clear exactly what information you consider private.
  • Limit access to confidential material to employees on a need to know basis. Since courts generally allow employees to use information they recall or can reconstruct from memory, it is probably best not to expose confidential information to employees in the first place, unless there is sufficient enough need to.
  • Stamp all documents and other material containing private information as confidential.

  • Store all confidential material in locked cabinets and drawers, or in restricted-access areas. You may be hard-pressed to convince a court that information is confidential if you have never taken safety precautions.
  • Meet with departing employees before they leave. Provide a copy of their signed confidentiality agreement, and remind them of what information is confidential and what may be shared. Also, clarify what material they may take with them and what must remain with the company.

The secret to retaining your competitive edge may lie in how well you safeguard your company's confidential information. Not only can taking clear steps to safeguard your information help prevent the inadvertent leaking of company secrets, but it can also help bolster your case in the event of a lawsuit. Being able to demonstrate that you have taken appropriate steps to secure your company's confidential information can make a difference in how a court judges any security breach that may occur.

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