Earlier this month, an employee of a Midwest manufacturing firm was sentenced to over a year in prison and a $100K fine for stealing trade secrets from his company before leaving to work for a competitor.
Employed as a salesperson, quality assurance manager, and plant metallurgist at a cast iron manufacturer in Illinois, the employee downloaded unauthorized data and documents from the company database before leaving his job, providing a trail for investigators. Before the man made his way out of the country to his new job waiting in China, he was apprehended at the Chicago O’Hare airport where the feds seized the stolen trade secrets and arrested him on the spot.
Few employees understand the consequences for stealing the trade secrets of their employers or that there are many properties that qualify for trade secret protection. Trade secrets need not be a patented invention or an intellectual creation that qualifies for copyright. It could be something as simple as a tried and true calculation to bid on a construction job or an undisclosed plan for entering new markets – most anything that gives a company an advantage in the marketplace may be a trade secret.
As sales is the backbone of any company, salespeople should note that even an asset like a customer list may receive trade secret designation. While names, addresses and numbers of clients which are susceptible to common knowledge may not be a violation, any information taken above and beyond what can be found in telephone directory may result in trade secret violations.
The legal framework regarding the protection of trade secrets typically requires that the information has economic value, must not be generally known or easily assembled, and that the business owner makes reasonable efforts to keep the information secret. As to the economic value, consider that an employer often puts a great deal of time, energy and money to create information that benefits a company. If an employee absconds with that information, they may be in violation of the law. However, on the other side of that coin, the business owner must act to protect the secrecy of information, which may translate into making it available on a need to know basis or binding employees to a written non-disclosure agreement in order make any legal action against the employee stick. .
Usually a non-disclosure agreement is part of a non-compete agreement signed upon accepting employment or at a later date with consideration. To protect legal interests companies often impose or establish a written policy detailing what it considers trade secrets, who may have access to the information, and how and under what circumstances it may be used. In the absence of an ironclad agreement , a company may have a weak argument in court if they go after an employee for trade secret violations. However, as in the earlier account of the Illinois employee facing incarceration and a hefty fine, there are many cases where former employees pay a high price for trade secret violations.
Employee Trade Secret and Non-Compete Agreement Violations Lawyer
Contact Des Moines Employment Law attorney Marc Humphrey For A Free Consultation
If you are being sued for violation of a non-disclosure or non-compete employment agreement, it is important to seek help from an experienced employment law attorney. Contact Des Moines employment law attorney Marc Humphrey for assistance today at 515-331-3510.
