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By Sanjeev Kumar
Founding Attorney

How can I prevent my employees from revealing my trade secrets?

Your trade secrets are often invaluable to the success of your business.  Trade secrets can consist of processes, designs, formulas, practices, or patterns that are not widely known and cannot be easily ascertained.  No matter the size of your business, you likely have valuable trade secrets.  Examples of trade secrets could include customer lists, technological innovations, secret recipes, and supplier lists.  With high employee turnover rates nationwide, it is critical that you as an employer take steps to protect your trade secrets.

What Are Your Trade Secrets?

Before you can protect your trade secrets, you will need to identify your key trade secrets.  Trade secrets will vary among businesses and the definition of a trade secret is quite broad.  One of the ways to determine what your trade secrets are is to think about what information or process your competitors would want to use.  If release of this important formula, technique, or the like would harm your business, it is likely a trade secrets.  Trade secrets have commercial value, but only if kept secret.

Take Steps to Protect Your Trade Secrets

Now that you understand what your company’s trade secrets are, you can take steps to limit general employee knowledge about them.  To keep your trade secrets legally protected, you must take explicit steps to protect them.  Without an attempt to shield these secrets, a court might hold that the trade secret is not a secret at all and thus not subject to protection.  You can take steps to guard your secrets by keeping them in a locked, safe place, if they are on paper, or limiting access of electronic files of trade secrets on the computer.

Limit who knows about your trade secrets as much as possible.  Draft a confidentiality or nondisclosure agreement for employees and business partners that clearly bars the sharing of the company’s confidential information, both while the employee is employed and after.  It can be helpful to remind employees of the laws concerning trade secrets from time to time.  Given that trade secrets can mean the difference between the success or failure of a business, it is important that you consult with a trade secret lawyer for assistance with protecting your important trade secrets.

About the Author
Sanjeev Kumar is the founder and principal at the Kumar Law Firm, which provides a wide range of legal services to entrepreneurs and business owners in the area of business & corporate law and intellectual property along with related areas of interest to clients such as business succession planning, wealth preservation through estate planning, and alternate dispute resolution.