In a perfect world, everyone would act honestly and respect the property and rights of others, and trade secrets woiuld be protected as a matter of respect and obligation. Unfortunately, that is not the case. Because reality is less honest, the courts are strict about only enforcing people’s trade secret rights when the proof is in writing.
Non-Disclosure Agreement
A non-disclosure agreement is the simplest and most often prefered means of proving you are actively protecting your intellectual property. The agreement does not have to be complex or even wordy. All that it needs to say is simply, “The information you are about to hear is confidential. This information cannot be shared with any unauthorized people. Sharing this information with anyone who is unauthorized will result in civil penalties and loss of employment.” After they have read and signed the agreement, they can then find out the confidential information.
Non-Competition Clause
In addition to requiring that employees do no reveal your trade secrets to anyone, it is also wise to consider asking them to sign an agreement that they will not compete with your business. After learning your important trade secrets, it could just as easily devestate your business if the employee resigns and starts a similar business using your methods. Non-competition clauses ensure that your employees cannot start a similar type of business, but are free to start a non-related business of their own.
Exit Agreement
As employees resign, it is important to remind them of the confidential information they obtained while working at the company. The simplest means of doing this is an exit agreement. The exit agreement simply states that the employee obtained confidential information while working for you that cannot be shared once they resign. If they do share the information after resigning, they are subject to civil penalties, just as they would have been at the time they were hired.