Help employees keep company secrets secret

You would think that a trial attorney with over 20 years’ experience would be cynical, but I believe that virtually all employees try to be loyal and want to work for their employer’s success. If nothing else, they know the employer’s prosperity means they won’t lose their job.

Since most of us spend the majority of our time at work, we naturally like to share our work experiences with families and friends outside the company.

Employers generally want employees to talk about their companies. It can be great publicity. A manufacturer of an ointment to treat mosquito bites, for example, likes it when employees tell friends that the ointment is non-oily and pleasant smelling, has all natural ingredients from locally grown flowers and performed great during tests. However, the employee who, in a bout of excessive chattiness, tells outsiders the exact combination of flowers, where to find them and the process the company uses in rendering them into an ointment, is a liability.

How do you help employees, who typically want their companies to succeed and prosper, determine the limits of what they may communicate and what’s off limits?

First, understand what information your company has that should not be communicated. Simply saying to employees, “Don’t talk about company business outside the company” is about as effective as saying, “Don’t make personal phone calls during business hours.” Moreover, lumping all company information in the pile of “do not communicate” indicates to employees that nothing is more secret than anything else. This devalues the information that you really need to keep secret.

Once you determine what is confidential and what is not, having employees sign a non-disclosure agreement is a good second step. The agreement should not specify the exact parameters of confidential or secret processes, but simply require employees to keep essential material confidential during their term of employment and after their employment ends. A well-drafted agreement can be enforced if the employee, for whatever reason, goes to a competitor.

Communicate personally

So, should you call all your employees together for a meeting? Distribute the confidentiality agreements? Have everyone sign them, then go back to work?

No.

Nor should you send an email or paper memo to employees and ask them “to sign and return the attached confidentiality agreement.” Either course is a waste of time.

Depending upon the size of your enterprise, speak with each existing employee individually, either in person or through supervisors with whom you’ve already met and discussed the issue. Hand the individual the agreement and give some examples of what is and is not confidential information.

But wait, there’s more. Ask the employee to give you an example of confidential material and non-confidential information he or she has contact with. Even employees who may not think they have access to confidential data probably do.

By doing this, you will know whether the employee has internalized the concept. You may even want to make notes on the agreement, listing examples the employees give. For new employees, as you orient or train them, spend some time talking about confidential material they may encounter.

This certainly takes more time and effort than simply distributing the agreements to be signed. But, in the event an employee falters in the future, you have a much better position either to counsel the individual or, if need be, to enforce your rights in court based on trade secrets.

For counseling, you can remind the employee of the discussion you had when presenting the agreement. In the event you need to enforce your rights against a competitor, you will be able to show that you took reasonable steps to safeguard your trade secrets.

Importance of company secrets

You have two other opportunities to help employees understand the importance of company secrets. First, when you become aware of a breach or a potential breach, take the time to remind all similar employees of the importance of secrecy as to some things they know or hear. But not with a memo.

If it is important enough to keep secret, it is important enough to mention in person to others, without embarrassing the person who slipped. If it is no more important than to be relegated to a memo, expect employees to ignore it.

Finally, each time you do a performance review remind employees of confidentiality. Your secrets and other critical information and processes give you a competitive advantage. Protect them by helping to plug the greatest source of leaks – well-meaning employees who speak without realizing what they may be giving away.

Alan Blakley is a lawyer with CR MILES PC in Fort Collins. He may be reached at afblakley@crmiles.com. The information included in this column is general information. You should contact your own lawyer before making any legal decisions.

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