(Not-So) Amicable Separations: Preventing, Investigating, and Responding to Trade Secret Misappropriation by Departing Employees
The end of even the best employer-employee relationship can be fraught with challenges, not the least of which is the possibility that the employee may — unintentionally or with malice — depart with valuable trade secrets, proprietary data, or sensitive information. To minimize the likelihood of such misappropriation, employers should establish, communicate, and follow clear policies and procedures at each stage in the hiring, employment, and separation process: When recruiting employees, at regular intervals during an individual’s employment, when the employment relationship is terminated, or if evidence of theft or misappropriation is uncovered during routine and follow-on investigations. Trade secrets are protected under the federal Defend Trade Secrets Act (DTSA), which defines a trade secret as business or technical information that derives value from not being generally known or readily accessible to the public through proper means and which the owner has taken reasonable measures to protect. Trade secrets are also covered by numerous state laws, the overwhelming majority of which have been based on the model Uniform Trade Secrets Act.