The success of a business can often depend on proprietary company information remaining protected. After all, if a competitor gained access to a company’s trade secrets, that company could lose all leverage in the marketplace. Information such as product design, business strategies, evolving technology and even operational procedures must be protected in order to secure the future of the business. In order to accomplish this, a company can implement the following tactics.
Include non-disclosure agreements in employee agreements
A well-drafted employee agreement is essential when it comes to protecting sensitive company information. One important component is the non-disclosure agreement, or NDA. This NDA is a legally-binding contract in which the employee agrees to keep certain company information confidential. Some of the information that could be included in the agreement would be financial information, customer information or intellectual property such as copyrights, trademarks or technology.
Get non-compete agreements signed
Employees with access to confidential company information may be a cause for concern if they decide to go work for a competitor. One way a company can protect itself from an employee sharing privileged information with the competition is to execute a non-compete agreement upon hiring. This type of agreement states that an employee may not work for a direct competitor for a specified period of time after leaving a company.
It is important to note that the state of Illinois does have some restrictions when it comes to enforcing a non-compete agreement. For instance, the Freedom to Work Act, which was enacted in January, 2022, prohibits this type of agreement for any employee with earnings of less than $75,000. And the earnings threshold will gradually increase through January 1, 2037 eventually capping at $90,000. Trying to enforce a non-compete with an employee who does not meet the earnings threshold at the time of signing will render the agreement void and unenforceable.
Maintain appropriate company procedures
In order to keep company information protected, employers should maintain strict procedures and policies for their employees in regards to security. A few ways to accomplish this would include:
- Clearly identify what information is classified or confidential. This way, there is no confusion regarding the security of the information.
- Limit who has access to sensitive company information. Certainly, the fewer people with access to trade secrets, the better.
- Update electronic monitoring. In terms of access, employers should have the ability to monitor who accesses private company information. Also, employee login credentials should be updated regularly. This can lower the chance of others gaining or keeping unapproved access.
- Institute non-solicitation policies. These agreements limit the ability of employees to ask fellow employees to leave with them if they go to another company. Additionally, it restricts employees from contacting current clients after going to work for a competitor.
Work with the right attorney to ensure legal protection
While the above tactics are very effective ways to protect confidential company information, if the documents are not prepared correctly, that protection is lost. For example, nondisclosure agreements and non-compete clauses are often contested in court. And the employee will succeed if the wording is not precise, or even if the court finds the agreement unreasonable. Our attorneys have extensive experience working to protect employers’ most protected trade secrets, as well as defending against claims for violating non-compete agreements or other types of restrictive covenants. Contact us at 847-223-1500 to learn how we can help your company maintain control over critical proprietary information.