As companies increasingly rely on digital tools and face high employee mobility, safeguarding valuable intellectual property becomes a pressing concern. Recent legal cases, such as JRM Construction Management, LLC v. Plescia, 2023 WL 2770479 (April 4, 2023), highlight the significance of robust trade secret protection strategies. Here, we explore the importance of protecting trade secrets, the challenges posed by technology and employee mobility, and strategies to mitigate the risks.

Know the Value of Trade Secrets

Trade secrets encompass confidential and proprietary information, including formulas, algorithms, customer lists, marketing strategies, and manufacturing processes. These secrets give businesses a competitive edge and are often the result of substantial investments in research and development. Unlike patents or copyrights, trade secrets provide perpetual protection as long as they remain confidential.

Modern Day Challenges

Technological Advancements: Digital tools have revolutionized data management, but they also pose risks when sensitive information is not adequately secured. Unauthorized access, accidental leaks, or intentional breaches can severely damage a company’s competitive position and reputation.

High Employee Mobility: With the rise of remote work and frequent job changes, the risk of trade secret misappropriation has increased. Employees with access to sensitive information may be tempted to take it with them when they leave, posing significant threats to their former employers.

The JRM Construction Management, LLC v. Plescia Case

The recent court case of JRM Construction Management, LLC v. Plescia underscores the importance of trade secret protection. In this case, two ex-employees of JRM reportedly kept and shared confidential information with their new employer, JRM’s competitor. The information included client presentations, estimating methods, and templates used for project bids. JRM sought an injunction to stop the disclosure and get the information back immediately. However, the court didn’t grant the request, noting that they needed more evidence to decide if JRM had taken enough steps to protect the information.

The court’s ruling reaffirms the need for businesses to have robust trade secret protection measures in place. It highlights the importance of implementing policies and procedures to safeguard confidential information and enforcing non-disclosure and non-competition agreements with employees.

How to Protect Trade Secrets

Identify and Label Trade Secrets: Start by identifying and categorizing your firm’s trade secrets. Clearly label them as confidential and ensure employees know their significance and the importance of maintaining confidentiality.

Implement Security Measures: Use secure technologies, encryption, and access controls to protect sensitive data. Limit access to trade secrets on a need-to-know basis and regularly update security protocols to adapt to evolving threats.

Confidentiality Agreements: Require employees, contractors, and business partners to sign comprehensive confidentiality agreements. These agreements should clearly define what constitutes a trade secret, prohibit unauthorized disclosure or use, and outline the consequences of breach.

Employee Training: Educate employees on the importance of trade secrets and their responsibility to safeguard them. Regularly conduct training sessions to raise awareness about the risks associated with trade secret misappropriation and the potential legal consequences.

Exit Procedures: Establish thorough exit procedures to ensure departing employees return all company property and relinquish access to confidential information. Conduct exit interviews to remind employees of their ongoing obligations regarding trade secrets.

Monitoring and Auditing: Implement monitoring systems to track access to trade secrets and detect any unusual or unauthorized activities. Regularly audit security protocols, update access controls, and evaluate the effectiveness of your trade secret protection strategies.

As technology advances and employee mobility increases, protecting your firm’s trade secrets becomes more challenging yet crucial. The JRM Construction Management, LLC v. Plescia case serves as a vital reminder of this. If you don’t, they could be stolen, and you may not be able to get them back.

Trust a Professional

Ensuring the protection of your trade secrets requires a comprehensive approach. Legal measures such as non-disclosure and non-compete agreements are vital in establishing the framework for safeguarding your valuable intellectual property. Additionally, it is crucial to clearly understand what constitutes a trade secret in a legal context and the potential implications when hiring individuals from rival companies.

To establish robust trade secret protection strategies tailored to your specific needs, we invite you to contact us.