How To Protect Your Trade Secrets In A Hybrid Work Environment

Protect your trade secrets.
As employees have access to more information electronically, the risk of theft rises dramatically. Here are steps to safeguard your IP.

One of the lasting legacies of the Covid-19 pandemic is an increase in the number of employees working remotely, whether fully or in hybrid roles. This new way of working necessarily requires employees to be able to access information away from the office, increasing the risks that employers’ most valuable information could be stolen.

Virtually all businesses have “trade secrets,” defined as business information that has commercial value derived from the fact that it remains secret. High-profile examples of trade secrets include the formula for Coca-Cola or KFC’s chicken recipe. But trade secrets can be much more mundane, including things such as financial information, collections of data, or supplier and customer lists. These secrets are often the “crown jewels” of a company, and having them fall into the wrong hands—such as those of a competitor—can cause real and immediate damage.

Companies are at increased risk of having their trade secrets stolen at several junctures.  A customer of a software company can use its access to the company’s proprietary software to develop its own system. A potential joint venture partner can use information shared during negotiations to enter into an agreement with a competitor. Or, as happens frequently, employees can take trade secrets with them upon departure to curry favor with a new employer. As employees spend more time away from the office and have access to more information electronically, the risk that they will be able to enact such a plan without detection increases dramatically.

To qualify for trade secret protection, employers are required to take reasonable steps to protect their trade secrets. We recommend the following strategies to reduce the risk of theft in the first place, and to ensure that, if something does go wrong, a court will protect your information as a “trade secret”:

• Identify your trade secrets. The first step in a trade secret protection plan is to understand what your trade secrets are. Think broadly. If in doubt, protect valuable information as if it were a trade secret.

• Update and reiterate confidentiality policies. Company policies should make employees aware of the procedures in place to protect trade secrets. These policies should be regularly reviewed to make sure they are up to date for the current remote environment, and employees should be frequently reminded of these policies. For example, companies should provide specific guidelines for how employees can keep information secure when working away from the office, including how to handle discussions of trade secrets during videoconferences and how to keep information secure from unauthorized users or listeners.

• Limit and monitor access to your trade secrets. Not all employees should be able to see all information.  Employees should only have access to trade secrets if they need the information to do their jobs. And of course, you should only share your trade secrets with individuals outside your organization if necessary for the business you are doing together. Utilize password-protections to ensure trade secrets are shared on a need-to-know basis.

• Utilize non-disclosure agreements. Before you share your trade secrets with anyone within or outside your organization, make sure that you have entered into a robust non-disclosure agreement, in which the recipient acknowledges they are receiving your trade secrets and that they have obligations to keep them secret.

• Prepare for employee departures. Company policy should require departing employees to return any of the company’s confidential information immediately, including any held on their personal devices. You should also act quickly to shut off an employee’s access to your system promptly after receiving news that they will be leaving the company. Finally, consider performing forensic analyses on departing employees’ computers to make sure sensitive information was not downloaded prior to their departure or shared with a new employer or other third party via email.

Remaining vigilant about protecting your trade secrets is critical to protecting the future of your business, especially when faced with a workforce that is increasingly operating fully online.


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