You Develop World-Changing Ideas. We Protect Them.

  1. Home
  2.  – 
  3. Business Litigation
  4.  – What Happens When A Former Employee Steals Your Trade Secrets?

What Happens When A Former Employee Steals Your Trade Secrets?

Whether you have a supplier that only works with one other company that you have kept secret for years or a recipe that only a handful of employees know, your trade secrets may be a major factor in your company’s success.

Processes you created, a client list you carefully curated over years and other important, proprietary information can help your company achieves success even while competitors struggle. Unfortunately, each employee that has access to your trade secrets is a potential source of a damaging information leak.

What can you do when a former employee starts their own business or goes to work for a while benefiting from the Trade Secrets they learned at your company?

Review the contract you signed with that employee

Ideally, your employment contracts will include clauses that help protect your company from exactly this situation. Non-disclosure agreements signed by your worker will provide a more straightforward means of holding them accountable for sharing your company’s trade secrets.

If you operate in more than one state, you may need to learn about California law. For example, while it isn’t illegal for your company to include a non-compete agreement in an employment contract, the courts won’t enforce it even if there is an issue with your former employee.

Thankfully, you don’t necessarily have to have a written contract with an employee to take action when a violation of your intellectual property rights could affect your business’s bottom line.

Gather proof that you protected the trade secret and the employee had access

Part of what makes information a trade secret is that it is information that has proven financial value and that it is not readily known to others. Showing how you limited access to your client list or otherwise attempted to protect your trade secrets will be an important part of a claim against your former employee or their new employer.

You will typically also need to be able to show that the employee that has since left your company had direct access to that information. Documenting how the other company has used that information can also help your case. You will have to take action, possibly including going to court, to force the other party to stop misusing your trade secrets and to potentially seek compensation for the financial impact of their misconduct on your company.

Recognizing the signs of a violation of your intellectual property rights can help you quickly act to protect your company’s future.