The Sedona Conference, Working Group 12 on Trade Secrets, has issued guidance on protecting trade secrets throughout the employment life cycle. This significant Commentary analyzes the tension between an employer’s interest in protecting its trade secrets and an employee’s interest in engaging in future employment.
The Commentary recommends an employer:
- Establish trade secret policies that dictate the employer’s expectations for protection, management, and use of trade secrets during and after the employment relationship. These policies should cover the procedure employees should follow if they have questions regarding their obligation to protect the employer’s trade secrets.
- Provide timely and sufficient notice of what the employer claims as trade secrets, policies and procedures employees must follow, and restrictions the employer intends to place on employees’ future mobility.
- Identify, address, and communicate legitimate concerns about a departing employee’s compliance with the employee’s continuing obligation to protect the employer’s trade secrets. An employer can communicate these concerns through exit interviews, reminder letters, and certification requests.
It also recommends an employee:
- Make reasonable efforts during the recruiting and onboarding period to identify existing agreements that may impose obligations that affect the candidate’s abilities to perform the duties of the proposed position.
- Consider the legitimate interests of a former employer in protecting its trade secrets.
- Take reasonable steps to mitigate the risk of misappropriating a former employer’s trade secrets by cooperating with reasonable exit interviews and returning any files that may remain in the employee’s possession at termination.
Employers should follow the Commentary’s framework and consider whether their company’s protection measures are tailored to their company’s business, the value and vulnerability of its trade secrets, and its employees’ roles and means of access. As Sedona Conference materials are often relied upon by courts, this Commentary is required reading for employers who hold trade secrets.