Keeping Trade Secrets Under Wraps
Employees at AmSouth Bank, a regional bank in the Southeast, are also reminded on their way out the door that they signed an agreement when they came on board, and what that means exactly. "We have to send them a reminder they [are] to leave customer lists here and [are] not supposed to solicit other employees" once they leave, said Janet Parker, senior vice president of employee relations. "It's a big concern. We take precautions to make sure we have the right procedures in place."
Slightly more than half of all companies have new and current employees sign nondisclosure agreements, according to a March poll by the Society for Human Resource Management. And 35 percent of companies remind departing employees of their "trade secret obligation."
On the flip side, however, only 7 percent of companies have new employees sign agreements that prevent them from bringing trade secrets from previous employers.
Some employers are afraid that those who had stagnant careers during the economic downturn will offer up trade secrets -- such as client lists -- to sell themselves in an interview.
"I think a lot of people have been kind of just hunkered down waiting for that next big opportunity," Chambers said. "They don't want to be part of the next flameout. So what are they going to offer? They will come to new companies saying, 'Here's what I can add.' " And then they potentially hand off proprietary information, clients or processes, such as how their current company was able to win various clients.
As much as technology has made it easier for employees to take and disseminate trade secrets, it also has made it easier for employers to locate the leak.
One employee at a software company recently left for a competitor with his first company's proprietary software. The thing was, he had to type in an identification sign-on to download the software. It was traced right back to him and the company is suing him, according to Cheskin.
Granted, Cheskin said, some employees do not realize that what they are doing is illegal, which is why he encourages employers to educate their workers. Or to reinvent their nondisclosure agreements. "They really need to think through who has information and try to narrow training and agreements toward that," he said. "Companies make it too broad, so it doesn't seem real. Think about what you're trying to protect."
But Susan Meisinger, president of the Society for Human Resource Management, said companies are learning how to be "more vocal" about the agreements, often marking client lists "confidential." That is an important practice these days, she said.
"There's an increase in litigation in this arena that shows it has become more important," she said. "But it also shows [employees] aren't as knowledgeable."
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