trade secret2

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Did she really think she’d get away with misappropriating 600 files from her former employer by surreptitiously downloading them onto a USB drive?  That’s what a former global marketing executive for Pfizer recently did just before she resigned.  Oh, and she apparently also sent to her personal email account a few dozen emails containing Pfizer’s trade secrets and other confidential information such as strategic marketing plans, sales information, marketing budget data and market research.  As you can imagine, Pfizer didn’t take kindly to her actions.  The company sought and obtained, within 24 hours, an ex parte temporary restraining order from a federal court enjoining the employee from using or destroying Pfizer’s confidential information.  Employee theft of confidential information is a serious issue and employees continue to do it, perhaps unaware they often leave behind their digital fingerprints.  So what’s a company to do to protect itself? Here are a few practical tips.

  1. Protect your trade secrets.  Employees who will have access to or be entrusted with using, developing and/or maintaining your company’s trade secrets and other confidential information should be required to execute a confidentiality agreement pursuant to which they agree not to use or to disclose the company’s information in any unauthorized manner and in which they agree to return to the company all copies of such information at the end of their employment.  These types of agreements are frequently used in connection with non-solicitation and non-competition agreements and together provide the employer with tools which may prove useful in both protecting the company’s trade secrets and preventing such information from being used for the benefit of a competitor.  Additionally, employers should take reasonable measures to limit access to their sensitive information to those who have a need to use it, thereby mitigating the risk of unwanted use or disclosure.
  2. Training and Education.  Establish, train and periodically re-train employees on company policies regarding use of company email system, internet, and confidential and trade secret information to emphasize the importance of such policies, advise employees of the consequences of violations of the policies and increase the likelihood of compliance with such policies.
  3. Examine a departing employee’s emails and computing devices for evidence of misappropriation.  The former Pfizer employee made Pfizer’s enforcement efforts somewhat easier by actually leaving electronic fingerprints suggesting she misappropriated the company’s trade secrets and other confidential information.  How did Pfizer know?  The company likely conducted a forensic examination of the former employee’s email account and computers (desktop, laptop, iPad, and cell phone) looking for evidence that she downloaded company materials and sent them to her personal email address.  Such investigations have the potential to yield compelling information demonstrating an employee’s breach of their obligations to the company.  You never know what you’ll find when you look.  While some employees are savvy enough to cover their tracks, others are not as sophisticated.
  4. Enforcement.  Armed with convincing evidence of misappropriation of its confidential business information, a company is more likely to obtain judicial relief to enforce the restrictive covenants.  Enforcement allows a company the ability to prevent further misappropriation of its trade secrets, to recover the confidential materials and thus prevent a competitor from using them, to obtain monetary damages it may have incurred as a result of the misappropriation and to develop a reputation for enforcement of its restrictive covenants. Taking such measures may serve as a deterrent to other employees who might otherwise think they can outsmart their soon-to-be former employer.

As always, if you have any questions about enforcement of restrictive covenants, you should consider contacting counsel who are familiar with the law and proper enforcement actions.