Tips for Preventing a Departing Employee from Taking Company Secrets

It is the electronic age, and businesses rely more and more on computers and electronic storage devices to house their most valuable assets. We trade secrets attorneys increasingly find ourselves helping businesses who suspect a departing employee has downloaded, copied, or emailed themselves the company’s most valuable information in the hopes of embarking upon a promising new career with a competitor.

What can you do in such a situation? The Quarles & Brady Trade Secrets & Unfair Competition Team provides you with the following tips.

Immediate Actions to Take

When an employee with access to the company’s confidential information resigns, you should immediately:

• ConductaThoroughInterview: When the employee resigns, you should conduct a thorough debriefing. You should ask the employee about their new employer and their new position. You should inquire into the products with which the employee will be working and the territories that the employee will be serving.

• Remind the Employee of Their Obligations: You should provide the departing employee with a copy of their confidentiality or non-compete agreement and remind them of their obligations under it.

• SeektheReturnofCompanyPropertyandObtainWrittenVerification: You should ask the employee to return all company property and information, including laptops, jump drives, disks, documents, and electronically stored

information. You should specifically ask the employee if they have any company information saved on a disk or stored electronically. You should ask the employee to verify in writing that they have returned all company property.

• InterviewOthers: Interview the employee’s supervisor to ascertain whether the employee has engaged in any suspicious activity.

When to Be Suspicious

Your suspicions that an employee has taken, or may be a stronger-than-average candidate for taking, confidential information should be raised in the following situations:

• the employee refuses to provide you with the identity of their new employer or the details of their new position;

• the employee refuses or avoids signing an acknowledgment that they have returned all company property;

• shortly before resigning, the employee seeks access to confidential information to which they had not before been privy;

• the employee has a high level of access to confidential information and is not leaving the company on good terms; or

• the employee has a high level of access to confidential information, and they are going to be working for a competitor in a position where this information would be helpful.

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Obviously, this is not an exhaustive list, and there are a number of other instances in which your suspicions may be raised. You should contact your attorney to discuss your concerns.

What to Do When Suspicious

If you suspect that an employee has taken the company’s confidential information, you should immediately take the following steps:

• LettheEmployeeGoImmediately: You should make the employee’s resignation effective immediately. Escort the employee back to their desk to collect their belongings and out the door.

• InvestigatetheEmployee’sComputer: You should work with an attorney to get the employee’s company-issued computer or hard drive to a computer-forensic expert. Do not hand over the laptop to your information technology department for analysis. Information technology personnel can (and will) inadvertently destroy key information.

• Maintain a Chain of Custody: When handling the employee’s company-issued computer, hard drive, or other storage device, keep a log of the persons who have had contact with it. This will assist you in later establishing its chain of custody, should it become evidence.

• SeekConfirmation: Send the employee a letter asking them for confirmation that (a) they intend to abide by the terms and conditions of any non-compete or confidentiality agreement, and (b) they did not take any of your company’s information with them upon their departure. Advise them that if they have any company-issued information on their personal electronics, they should preserve those items, they should not delete or use those items, and they should contact you to arrange to have the information removed. If the employee does not respond, consider sending a second letter and copying their new employer to inform them of a potential issue.

Quarles Can Help

Quarles & Brady has an entire group of attorneys — the Trade Secrets & Unfair Competition Team — dedicated to helping clients faced with these issues. Their experience in this area of the law allows them to provide you with efficient and reliable advice. Quarles & Brady has assisted clients with these issues on both an hourly and flat-fee basis. If you need assistance, please contact the team chair, Nicole J. Druckrey, at 414-277-5777 or nicole.druckrey@quarles.com, or your Quarles & Brady attorney.