Klein & Wilson

Protect your business when a former employee uses a trade secret

To compete in the modern marketplace, a business needs to offer something unique or do it better than others. Being able to offer a similar product or service at a lower price is also a great way to remain competitive. There has to be something that sets your company apart for you to secure and retain clients or customers.

To give your business an edge, you have likely created special recipes, formulas, processes or practices that are unique to your business. Those special practices, services, recipes or knowledge are part of your company's trade secrets.

Trade secrets are information that is critical to the daily operation and future success of your business. Some employees, ranging from those who actually make products to those who fill an executive role, will inevitably have access to your trade secrets. Unfortunately, it is possible that someone could use those trade secrets for their own benefit.

Limit who has access to the most important trade secrets

The more people who know about secret recipes, ingredients or practices, the more chances there are that one of those people will break your confidence and use that information by starting a competing business or selling your secrets to someone else.

When you limit who has access to your biggest trade secrets, it is easier to prove who stole or used them. From making the secret sauce yourself to only sharing information with certain people, there are many ways to protect your trade secrets from falling into the hands of an unscrupulous employee.

Protect your trade secrets in your employment contract

When you hire someone new or promote an existing team member, it is a common practice to have them fill out a contract for their position. The employment contract doesn't just explain your expectations about their performance. It could extend critical legal protections to you as well.

Many employers have their staff execute non-compete agreements and non-disclosure agreements as a way to prevent their staff from using any trade secrets that they have access to for personal benefit. If someone sells your trade secrets, opens a competing business or goes to work for a competitor, you may be able to take legal action against them to protect your business.

Work with an attorney who understands intellectual property laws

Intellectual property is different than standard business law. Successfully arguing an intellectual property case usually requires experience in litigating these cases. The theft of your business' intellectual property can damage your income.

The sooner you consult with an attorney who understands the protections under both state law and your contracts for your trade secrets, the better your chances of mitigating any potential damage caused by former employees.

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Klein & Wilson
4770 Von Karman Avenue
Newport Beach, CA 92660

Phone: 949-478-0521
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