• gilperlberg

Employee Mobility & Trade Secrets


I spoke a few days ago with a client I had worked with in the past. We were just catching up. He told me that things are going very well, he is increasing his team and is in the midst of hiring a few experienced engineers for the R&D group. However, he was troubled by a recent event.

A few managers in his team conduct the first part of the interview process. In a progress review session, he overheard a couple of them relating how some of the interviewees are eager to share information relating to their current place of work. They were discussing what they have learned regarding some of the competitors. For example, internal business processes and development activities.

My client voiced a few concerns:

A. It seems that neither the interviewees nor the managers were aware that some of this information may be trade secrets. Definitely not general knowhow that travels with the employee.

B. Employee mobility is a given. He always conducts exit interviews with departing employees, and reminds them of the confidentiality clause they signed when they joined the company. However, it seems that he is “closing the stable door after the horse has bolted”.

C. His company is at risk by accepting inbound information. Their valuable IP is being contaminated during the interviewing processes.

During these days of employee mobility most companies conduct exist interviews with departing employees, reminding them of the confidentiality clause they signed when they came aboard.

Many companies also conduct on boarding training to new employees, alerting them NOT to disclose information from previous work places. Information that might contaminate the company’s IP.

Nevertheless, there is still a significant and often overlooked gap, with respect to trade secret awareness in an era of rising employee mobility. Consider an employee who has been with a current employer for a few years and is looking to “move on” because his ability to move up the ranks is limited, seeking a better compensation package or for any other reason. He seeks out companies in the same industry segment, where he can leverage his experience. In interviews, his goal is to make a good impression and to showcase his relevant knowhow. It has been years since he signed the employment contract, in which, one of the clauses mentioned CONFIDENTIALITY. The interview precedes his exit interview leaving a gap where the risk of trade secret misappropriation is high.

Yet the threat to your trade secret portfolio is not only form misappropriation outwards - inbound trade secret contamination is also a concern. The value of your trade secret portfolio is also a function of its "purity", that is, that it is not contaminated with trade secret information belonging to other companies. As in the case described above, if managers and employees are not aware of the risk of inbound trade secret contamination, if there are no procedures and training preventing it, it will likely occur.

The solution to this gap and similar ones is continuous trade secret management and training. Dealing with trade secrets as a "once in a while event" will likely fall short of providing the protection you seek.


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